SAP currently finds itself embroiled in controversy amid allegations of sanctions evasion and bribery scandals spanning multiple jurisdictions.
The latest uproar stems from revelations that SAP purportedly employed code names and established a shelf company in Botswana to sidestep European Union (EU) sanctions imposed on the Zimbabwean government in the early 2000s. According to reports by the Sunday Times, Twenty Third Century Systems (TTCS), a Zimbabwean company, is pursuing approximately R1 billion in damages from SAP for revenue losses incurred when the software giant terminated their agreements in 2019. TTCS alleges that SAP’s actions were aimed at circumventing EU sanctions and maintaining business ties with Zimbabwe.
Ernest Zvinavashe, managing executive at TTCS, condemned SAP’s conduct, stating, “This was a clear effort on the part of SAP to avoid having to comply with the various sanctions and to continue doing business in Zimbabwe despite the sanctions.”
SAP’s global public relations head, Marcus Winkler, acknowledged the ongoing litigation with TTCS but declined to comment further, citing the company’s policy on pending legal matters.
However, SAP’s legal woes extend beyond the Zimbabwe sanctions debacle. In January 2024, court documents surfaced implicating SAP in a bribery scandal involving Eskom officials in South Africa. The United States government filed charges against SAP, alleging that the company engaged in corrupt practices to secure business contracts with state-owned enterprises. The complaint alleges that SAP made illicit payments to intermediaries closely linked to South African government officials, falsely recording them as commissions or legitimate expenses.
Furthermore, text message exchanges between City of Johannesburg officials and SAP employees purportedly reveal discussions regarding bribery payments and strategies to conceal them.
Earlier in the same month, SAP agreed to pay $220 million to settle investigations into bribery allegations in South Africa and Indonesia. The US Justice Department and the Securities and Exchange Commission (SEC) spearheaded the probe, uncovering evidence of bribery schemes orchestrated by SAP to secure lucrative government contracts.
Nicole Argentieri, acting assistant attorney general of the Justice Department’s Criminal Division, condemned SAP’s actions, emphasizing that the company had paid bribes to officials at state-owned enterprises to gain unfair advantages in the marketplace.
These allegations cast a shadow over SAP’s reputation and highlight the pervasive nature of corruption within the global business landscape. As authorities intensify their scrutiny and legal proceedings unfold, SAP faces mounting pressure to address these allegations and uphold the principles of integrity and transparency in its business practices.
