NEWS

SAP Admits: We Paid Kickbacks To Guptas For Contracts

The software company says its South African operations paid "commissions" to Gupta-linked companies for contracts with SOEs.

27/10/2017 07:12 SAST | Updated 27/10/2017 07:12 SAST
Leonhard Foeger / Reuters

Software company SAP has admitted that its South African operation paid about R107-million in bribes to Gupta-linked associates to secure contracts at Transnet and Eskom. According to Business Day, this forms part of a US Department of Justice and US Securities and Exchange Commission investigation. SAP reportedly said it handed over the information to the US authorities voluntarily.

In July, amaBhungane and Scorpio reported that SAP, by way of a "sales commission agreement", had paid a Gupta-controlled company to help it to land contracts with state-owned companies.

SAP executive board member Adaire Fox-Martin reportedly said that to date, the company's internal investigation, conducted by a law firm, found that between December 2014 and November 2016, SAP concluded four contracts for the sale of software to Transnet and Eskom. An entity linked to the Gutpas was used to help the company secure these contracts.

She said that "commissions" were paid to Gupta-linked companies totalling R94-million. This amount rose to R107-million because the payments included VAT.

SAP said it would make public the findings of its investigation when it was completed. The company has reportedly taken action against three employees, and apologised for the "profound impact" the scandal had had on its employers, customers and partners.

SAP has also eliminated "commissions" on public sector contracts for countries that rank below 50 on Transparency International's index.

SAP initially denied the allegations, shortly after the kickbacks scandal was revealed by amaBhungane and Scorpio in July. According to Eyewitness News (EWN), SAP Africa MD Brett Parker said at the time that SAP took "strong exception" to the allegations and was considering "possible action".

"The accusations made around the use and payment of subcontractors are unfounded and unsubstantiated. 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, SMEs 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 global due diligence and certification processes," he reportedly said.