Software giant SAP has been ordered to hundreds of millions of rand in contract fees to the department of water & sanitation after the Special Tribunal South Africa declared a 2016 software licence and support agreement between the two parties unconstitutional and invalid.
SAP must pay the department an amount of at least R263.3-million within five days of the order.
The Special Tribunal has a statutory mandate to recover public funds syphoned from the fiscus through corruption, fraud and illicit money flows.
The tribunal ordered that:
- The department may not use any of the software licensed under the 2015 and 2016 licence agreements;
- SAP must pay the department an amount of R413.1-million, which represents the total amount the company received pursuant to the agreement;
- SAP must pay back at least R68-million in yearly maintenance fees paid by the department; and
- SAP must pay the department an amount of at least R263.3-million within five days of the order.
“For the avoidance of doubt, if the Special Tribunal determines that SAP is required to pay the department more than R263 282 173.78, because the Special Tribunal determines that SAP may not make some or all of the deductions that it submits it is entitled to make, then that further amount will be payable, together with interest running from the date of this order,” the court said.
The tribunal said an issue that remains in dispute is if the software company is entitled to deduct payments it made to a third party during the execution of its duties.
Read: SIU seeks R400m from SAP over dodgy contracts
“To enable the Special Tribunal to determine the issues, SAP will, within 15 court days of this order, file an affidavit solely dealing with the payments made to third-party software companies and the factual basis for its contention that these expenses ought to be deducted from the amount to be paid to the department of water & sanitation.
“[Within] 10 court days of receipt of the SAP’s affidavit, the Special Investigating Unit and the department of water & sanitation will file their affidavits in answer thereto. The presiding member of the Special Tribunal shall be requested to convene a case management meeting within 10 court days of the expiry period thereto,” the court said.
SAP responds
Asked for comment, SAP South Africa issued a statement in which it described the outcome as a “settlement”.
“Following a comprehensive investigation relating to the sale of SAP software licences to the department of water & sanitation (DWS), the Special Investigating Unit, the DWS and SAP South Africa have together reached a settlement. DWS remains an SAP customer and SAP continues supplying and maintaining DWS’s software investment, working towards improved billing and better service delivery,” the company said.
It added that SAP “remains committed to maintaining a robust, world-class compliance programme”. — (c) 2022 NewsCentral Media