SAP finds payments made to Gupta-linked entities, as well as mismanagement

SAP finds payments made to Gupta-linked entities, as well as mismanagement

German ERP giant SAP has admitted irregularities and indications of misconduct in its South African business following a major corruption probe related to public sector deals worth nearly $50m.

SAP SE (NYSE: SAP) today announced final results of its investigation into software contracts with South African state-owned enterprises (SOE) Transnet SOC Ltd. and Eskom. The firm admitted it paid more than US$8 million (R95.24 million) to intermediary companies controlled by the Gupta family.

Last month, South African police raided Gupta properties there as part of an investigation into their dealings.

SAP said a year ago it's being probed by the US Department of Justice and the US Securities and Exchange Commission over how it won contracts with South African state businesses.

She said the investigation also found no evidence that SAP had direct contact with any member of the Gupta family or that of the Zuma family.


When the scandal broke a year ago SAP placed both the MD and financial director of its South African unit on administrative leave.

SAP noted that these executives have since resigned from the company. Presided over by independent senior legal counsel, SAP instituted disciplinary proceedings against three of its senior executives, who were put on administrative leave in July 2017 and formally suspended in October 2017. Under South African labour law, a disciplinary process can not continue if an employee resigns. SAP reported in October that the fourth employee placed on administrative leave has since returned to work.

"This journey has taught us profound lessons and provided us with reasons to reflect on our business, our processes and our responsibility towards our employees, customers, partners and the South African public", said EMEA and China business leader Adaire Fox-Martin, who was brought in to deal with the situation.

SAP said that it has taken a decision to end all sales commissions on public sector deals in countries with poor corruption ratings.

"To this end, we would like to reiterate the apology we made a year ago to our stakeholders in South Africa", said Fox-Martin. "In SAP Africa we have appointed an additional legal compliance officer".

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