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SAP admits misconduct in Gupta deals

By , ITWeb
South Africa , 08 Mar 2018

SAP admits misconduct in Gupta deals

German software maker SAP found compliance breaches and "indications of misconduct" in $50 million (R595 million) of public sector deals in South Africa involving the Guptas, friends of former president Jacob Zuma accused of corruption, it said on Thursday.

Outlining the findings of an external legal review of five software deals with state-run electricity firm Eskom and rail-freight company Transnet, SAP said three executives suspended last year had resigned without severance pay.

SAP admitted it paid more than $8 million (R95.2 million) to intermediary companies controlled by the Guptas. One of the Gupta brothers, Atul, was declared a fugitive from justice and fled South Africa after Zuma was forced out of office by his party last month.

However, the company said there was no evidence of payments directly to South African government officials.

As a result of the investigation, SAP said it had tightening up its compliance and anti-corruption procedures, including banning sales commissions on public sector contracts in countries with poor graft ratings, including South Africa.

"The investigation has confirmed that even strong compliance systems are vulnerable and therefore require eternal vigilance," SAP board member Adaire Fox-Martin said in a statement. "While we cannot turn back the clock, we can promise to do better."

In July 2017, a report by AmaBhungane and Scorpio claimed that in August 2015, SAP signed a "sales commission agreement" with a small Gupta-controlled company that specialises in selling 3D printers.

It pointed out the terms suggest a thinly disguised kickback arrangement: if the Gupta company were the "effective cause" of SAP landing a Transnet contract worth R100 million or more, it would get 10%. In the year to follow, the report added, SAP paid the company, CAD House, a whopping R99.9 million, suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies.

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