SAP has moved to fill the vacancy left by former MD Brett Parker, who resigned last year following allegations the company paid kickbacks to Gupta family-owned companies to secure contracts at state-owned enterprises.
The German business software giant has appointed Cathy Smith to the role, replacing Claas Kuehnemann, who had been running the operation in an acting capacity since July 2017. Kuehnemann will move into a leadership position with SAP in Switzerland.
Smith is the first female leader of SAP Africa, the company said in a statement on Monday.
She joins SAP from Cisco, where she was MD for sub-Saharan Africa. Prior to Cisco, Smith spent 23 years at IBM in a variety of leadership roles. She starts at SAP with immediate effect.
Kuehnemann will remain as a nonexecutive director on the SAP South Africa board. Other members of the board are Smith, Mehmood Khan, Peter David and Candice Govender (all in executive roles). The other nonexecutives on the board are Lufuno Nevhutalo and Faith Masilo.
Smith’s appointment comes just days after SAP admitted it had made payments to Gupta-linked companies and uncovered irregularities in the “management of third parties” and adherence to its compliance processes.
The Walldorf-headquartered company said it finalised an investigation into contracts with Eskom and Transnet and found no evidence of payments to any employees of those companies or to any government officials.
SAP began internal and external investigations after investigative journalism units amaBhungane and Scorpio reported last year that SAP paid a 10% “sales commission” to a company controlled by the Guptas to secure a contract worth at least R100m from state-owned Transnet. According to the report, the terms suggested a “thinly disguised kickback arrangement”.
Gupta Leaks
The report, which drew on information contained in the so-called “Gupta Leaks” e-mail trove, said that in August 2015 SAP signed a “sales commission agreement” with the Gupta-controlled CAD House, which sells 3D printers.
“The terms suggest a thinly disguised kickback arrangement: if the Gupta company were the ‘effective cause’ of SAP landing a Transnet contract worth R100m or more, it would get 10%,” the report stated. In the year that followed, SAP paid CAD House R99.9m, it added, “suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies”.
SAP said its investigations found no evidence of any payment or attempted payment made to any South African government official or any employee of an SOE in connection with the Transnet and Eskom transactions.
In July 2017, the global software provider contracted Baker McKenzie to investigate its public-sector contracts in South Africa.
“Baker McKenzie has finalised its investigation of SAP’s business interactions with Gupta-related entities in connection with Transnet and Eskom. To date, the investigation has found no evidence of any payment to any government official or to any employee of an SOE, including any employee of Transnet or Eskom. However, the investigation has uncovered indications of misconduct in issues relating to the management of Gupta-related third parties.”
In a statement, Adaire Fox-Martin, member of the executive board of SAP, said: “This journey has taught us profound lessons and provided us with reasons to reflect on our business, our processes and our responsibility towards our employees, customers, partners and the South African public. The investigation has confirmed that even strong compliance systems are vulnerable, and therefore require eternal vigilance. While we cannot turn back the clock, we can promise to do better. To this end, we would like to reiterate the apology we made last year to our stakeholders in South Africa. We remain committed to this country and the rest of the continent, and to growing our business and investment here.” — (c) 2018 NewsCentral Media