German multinational software company SAP has entered into final settlement agreements with the US department of justice, the US Securities and Exchange Commission and South Africa’s National Prosecuting Authority. It will pay over US$220-million (R4.1-billion) to resolve the claims against it.

The company said it is “pleased” to have reached the agreements regarding what it termed “historic compliance issues”, and said the latest developments “close all compliance matters under investigation in the US and South Africa”.

The settlement comes in response to reports of the Walldorf-based company’s dealings with the notorious Gupta family, who were close to former President Jacob Zuma.

In 2018, $11-million was allegedly paid by SAP in improper commissions to win business at Eskom and Transnet. The software giant, whose co-founder, Hasso Plattner, owns Fancourt in George in the Western Cape, was one of a number of international companies subjected to corruption probes in South Africa related to state capture under Zuma’s corruption-tainted presidency.

Auditor KPMG and consultant McKinsey & Co were also entangled in allegations surrounding the Guptas, who are friends with Zuma and have been in business with his son. The Gupta and Zuma families deny any wrongdoing.

SAP began internal and external investigations after investigative journalism units amaBhungane and Scorpio reported in 2017 that SAP paid a 10% “sales commission” to a company controlled by the Guptas to secure a contract worth at least R100-million from state-owned Transnet. According to their report, the terms suggested a “thinly disguised kickback arrangement”.

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 suggested a thinly disguised kickback arrangement: if the Gupta company were the ‘effective cause’ of SAP landing a Transnet contract worth R100-million or more, it would get 10%,” the report stated. In the year that followed, SAP paid CAD House R99.9-million, the report added, “suggesting SAP used the Gupta influence network to drive sales of R1-billion to Transnet and other state-owned companies”.

Bribes

Late on Wednesday, the US justice department’s criminal division stated: “SAP paid bribes to officials at state-owned enterprises in South Africa to obtain valuable government business. This resolution — our second coordinated resolution with South African authorities in just over a year — marks an important moment in our ongoing fight against foreign bribery and corruption.”

According to court documents, SAP and its co-conspirators made bribe payments, cash payments, political contributions, and wire and other electronic transfers, along with luxury goods purchased during shopping trips.

“In South Africa, between approximately 2013 and 2017, SAP, through certain of its agents, engaged in a scheme to bribe South African officials and to falsify SAP’s books, records and accounts, all with the goal of obtaining improper advantages for SAP in connection with various contracts with South African departments and agencies, including the City of Johannesburg, the City of Tshwane, the department of water & sanitation and Eskom Holdings,” the documents recorded.

Read: New MD for SAP in Southern Africa

“This successful resolution against SAP is another example of the power of relationships and persistence,” said Los Angeles FBI assistant director Donald Always. “The sustained diligence by the prosecution team and continuous collaboration with South African law enforcement, regulators and prosecutors identified corrupt activity in multiple countries. The FBI will continue our nonstop efforts to identify, investigate and prosecute companies wilfully engaging in corrupt activities around the world.” — © 2024 NewsCentral Media

AI-generated summary of this article

SAP settles corruption probe in US and South Africa over dodgy contracts with state-owned enterprises linked to Gupta family.
SAP pays over $220-million (R4.1-billion) to resolve the claims against it.
SAP admits to paying bribes to officials to obtain valuable government business.