German software giant SAP has placed its South African management team on “administrative leave” and promised a wide-ranging probe, to be led by a law firm, into allegations of bribery and corruption involving the Guptas.
In a statement issued late on Wednesday evening, SAP said it has initiated an independent investigation spearheaded by a multinational law firm and overseen by executive board member Adaire Fox-Martin to “vigorously review contracts awarded by SAP South Africa”.
The reaction by SAP marks a distinct shift from the position it had taken earlier, when SAP Africa MD Brett Parker lashed out at local media outlets for publishing the allegations and threatening “various possible actions”. Parker said in a “holding statement” on Tuesday that the “accusations made around the use and payment of sub-contractors” were “unfounded and unsubstantiated”.
On Tuesday morning, the Daily Maverick and News24 published a report written by investigative journalism outfits amaBhungane and Scorpio, in which it is alleged that the software maker agreed to pay 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”.
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 in Walldorf has now moved to try to contain the damage, saying it has launched an internal review as part of its “utmost commitment to compliance” and will make the results of the investigation public once it is concluded. (See TechCentral editor Duncan McLeod’s Tuesday column, SAP must open itself to independent probe.)
“Consistent with company policy, SAP has brought in senior expert staff across all relevant functions while the current management team has been placed on administrative leave pending the findings of the review,” the company said in Wednesday night’s statement.
“SAP stands for integrity, transparency and compliance,” said Fox-Martin in the statement. She leads SAP’s business in Europe, the Middle East, Africa and China.
“We strive to be exemplary in the manner in which we serve our customers and partners, and in how we treat our employees. Full transparency and integrity are imperative at our company, and we will not tolerate any misconduct.”
The statement said SAP policy is to “carry out all company activities in accordance with the letter and spirit of applicable legal requirements and therefore maintain the highest standards of business ethics”.
“SAP strongly adheres to its Global Code of Business Conduct and is committed to follow disciplined and transparent transactions.”
Fox-Martin is currently traveling to South Africa to “address the concerns of customers, partners and employees”, it said. — (c) 2017 NewsCentral Media