German software giant SAP is “investigating various possible actions” after a report on Tuesday said that it had become embroiled in a corruption scandal involving a Gupta front company.
According to the report published by the Daily Maverick and News24 on Tuesday, SAP 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”.
But SAP has hit back hard at the report, with its MD for Africa, Brett Parker, saying the business software maker “strongly rejects allegations of kickbacks recently made by some South Africa-based media. The accusations made around the use and payment of sub-contractors are unfounded and unsubstantiated.”
The report, written by investigative journalism units amaBhungane and Scorpio, and which draws 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, a small company that 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, “suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies”, the report added. It said the money flowed straight out of CAD House again, to other Gupta companies, including Sahara Computers and Sahara Systems.
But Parker fired back in Tuesday’s statement: “SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest global compliance and legal standards. As part of its day-to-day business, SAP South Africa engages various subcontractors, SMMEs and partners and it has always been and will continue to be SAP’s policy to partner with a wide pool of organisations that qualify for our partner programme, if those organisations successfully meet the exacting criteria of our comprehensive global due diligence and certification processes.”
He said SAP takes “strong exception” to the report, and is “investigating various possible actions”. It did not say what those actions might include. — © 2017 NewsCentral Media