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SAP responds to DA action

By , ITWeb
South Africa , 18 Jul 2017

SAP responds to DA action

Under-fire German software giant SAP has acknowledged the Democratic Alliance's (DA's) move to lay criminal charges against the company's South African operation over the #GuptaLeaks saga.

According to a report by AmaBhungane and Scorpio last week, the enterprise software company allegedly paid a Gupta front R100 million in "kickbacks" for it to access lucrative state contracts.

Following the reports, the opposition party yesterday issued a statement saying it will lay charges of money laundering and corruption against the South African component of global software giant SAP, and Gupta-affiliated company CAD House, following allegations that R100 million in kickbacks changed hands between the companies.

"In a sales commission agreement, SAP appointed CAD House on a consultancy basis and agreed to pay them 10% in sales commission, if the company helped them secure a Transnet contract. This consultancy is rather irregular considering SAP is an international software giant which had existing contracts with Transnet. Furthermore, CAD House is a small company which specialises in selling 3D printers and which allegedly had no previous relationships with SAP or expertise in this field," the opposition party says in the statement.

"The DA has reason to believe SAP South Africa procured the services of CAD House purely because they wanted access to its owners, Duduzane Zuma and the Guptas' connections within Transnet with a view to securing a lucrative contract. The DA will, therefore, proceed to lay charges of corruption and money laundering against: SAP South Africa – directors and employees; CAD House – members and employees; and any other person who had material interests in this dodgy deal."


After initially denying the claims last week, SAP later initiated a probe into the bribery allegations overseen by executive board member Adaire Fox-Martin to "vigorously review contracts awarded by SAP South Africa".

The company also announced it had appointed multinational law firm Baker McKenzie to lead the external investigation in concert with other global experts such as forensic firm FTI Consulting.

It also placed the current SAP SA management team on administrative leave pending the findings of the review. Claas Kuehnemann has since been appointed as acting managing director for Africa while the company's investigation into its South African business is conducted.

In a statement issued following the DA's move, SAP says: "SAP has taken note of the DA media statement. As previously communicated, SAP has initiated an investigation into the allegations and has, consistent with company policy, placed the current management team on administrative leave pending the findings of this investigation.

"SAP strongly adheres to its Global Code of Business Conduct and stands for integrity, transparency and compliance. SAP is committed to the highest standards of business ethics and seeks to ensure all transactions are carried out transparently and in accordance with the letter and spirit of applicable laws.

"SAP will not be making any further comment related to the DA media statement until it has concluded its investigation."

In its statement, the DA notes SAP has launched an internal investigation into this matter and has subsequently suspended a number of its key executives in SA.

"It is simply not enough that the implicated SAP South Africa executives are scapegoated; these dealings must have gone higher up in SAP and all those involved should be held accountable. This is not the first time SAP has been caught with its hands in the cookie jar. The firm has previously been found guilty of bribery in numerous countries and the revelations that SAP South Africa had ignored a number of red flags about CAD House is even further cause for concern.

"As the extent of the Guptas' capture and corruption continues to be exposed, one man seems to be the spider at the centre of the web with regards to dodgy dealing at state-owned entities and that is former public enterprises minister Malusi Gigaba.

"The SAP deal is the seventh dodgy deal that happened under Gigaba's watch as public enterprises minister and it is highly unlikely this is coincidental; where there is smoke there is fire. The DA will continue to fight against any and all entities that make dodgy deals with the corrupt Guptas and Zumas.

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