[dropcap]G[/dropcap]erman software company Software AG has started an “internal review” following the publication of an article on Tuesday that said it appeared it had entered into a “kickback agreement” with Gupta-controlled Global Softech Solutions (GSS) to secure contracts from Transnet and other companies.
In a terse statement e-mailed by its head office on Tuesday afternoon, Software AG said it is “not aware of any non-compliant business practices in its South Africa operations”.
“Based on current media speculation, the company has started an internal review. Please understand that Software AG cannot make further comment until this review has been completed,” the statement said.
The media report, published by the Daily Maverick and News24, comes just two weeks after SAP found itself caught up in allegations that it, too, had paid kickbacks to a Gupta-controlled company — CAD House — to secure business from Transnet and other government entities.
According to the report, Software AG entered into an “apparent kickback agreement” with GSS to secure a R180m contract from Transnet Freight Rail.
It reportedly agreed to pay the company as much as 35% of the value of contracts it secured with Transnet, MultiChoice, Sasol, the department of correctional services and the Mangaung (Bloemfontein) municipality.
MultiChoice and Sasol reportedly confirmed that they had discussions with Software AG, with MultiChoice placing business with the company, but both firms denied any knowledge of GSS.
Guptas
According to the report, Sahara Systems, which is owned by the Guptas, was in the process of buying into GSS at the time. It alleged that Software AG sales director Riaaz Jeena created a second sales commission deal, “seemingly to ensure he, too, would receive a slice of the pie”.
“It is not clear how much money flowed from Software AG to GSS as several of the opportunities identified did not materialise,” the report said. “But there is very little evidence that GSS earned its fees by identifying leads or doing the sales legwork.
“As with SAP, the Software AG commission agreement comes across as stage managed to disguise payments to politically connected people and their companies, in essence an apparent kickback for helping Software AG to secure business.”
Software AG is the second largest software company in Germany after SAP and operates in more than 70 countries around the world. It is traded on the Frankfurt Stock Exchange and is best known for its Adabas database management system and its Natural development language.
SAP has taken more action over the allegations against it than Software AG has (so far), suspending its top four executives in South Africa and commissioning an international law firm to probe the allegations against it. — (c) 2017 NewsCentral Media