SAP, the renowned German software corporation, has finalized settlement agreements with the U.S. Department of Justice, the U.S. Securities and Exchange Commission, and South Africa’s National Prosecuting Authority, agreeing to pay more than US$220 million (approximately R4.1 billion) to address allegations against it.
Expressing satisfaction, SAP acknowledged the resolution of what it referred to as “long-standing compliance issues,” noting that these recent developments conclude all compliance investigations in both the U.S. and South Africa.
This settlement follows investigations into SAP’s connections with the Gupta family, notably associated with former South African President Jacob Zuma. In 2018, SAP allegedly paid $11 million in illicit commissions to secure contracts with Eskom and Transnet. The software company, co-founded by Hasso Plattner, who also owns Fancourt in the Western Cape, became a focal point in corruption investigations related to Zuma’s controversial tenure.
Other entities like KPMG and McKinsey & Co faced similar allegations involving the Guptas, who have ties to the Zuma family. Both families have consistently denied any unlawful activities.
Initiating both internal and external probes, SAP responded to revelations from investigative reports by amaBhungane and Scorpio in 2017. These reports indicated that SAP had funneled a 10% “sales commission” to a Gupta-affiliated company, CAD House, aiming to secure a lucrative contract with Transnet. Such findings pointed towards a potential kickback arrangement, with SAP allegedly leveraging Gupta connections to facilitate deals worth around R1 billion with Transnet and other state-owned entities.
The U.S. Justice Department’s criminal division highlighted SAP’s involvement in bribing officials from South African state-owned enterprises to gain lucrative government contracts. Court records reveal a series of illicit activities, including bribe payments, political contributions, and luxury purchases, spanning from 2013 to 2017. SAP’s engagement in these activities targeted various South African entities, such as the City of Johannesburg, City of Tshwane, and Eskom Holdings.
Donald Alway, Assistant Director of the FBI in Los Angeles, commended the collaborative efforts between U.S. and South African authorities, emphasizing their relentless pursuit in uncovering and prosecuting corrupt practices on a global scale.
