U.S. justice department launches investigation into SAP-Gupta dealings

Violet Tucker
October 27, 2017

The SAP board has since made a decision to eliminate sales commissions on all public sector deal, "In countries with a Corruption Perceptions Index (according to Transparency International) below 50, effective immediately".

SAP have voluntarily disclosed this information to USA authorities and it must now do the same thing in South Africa, and volunteer this information to the South African Police Services (SAPS).

The Guptas also managed to obtain a bid by SAP to provide commercial software for use in the South African public service.

"In connection with these four contracts, SAP provided software and received revenue totaling approximately R660 million (approximately United States dollars 48 million), and paid commissions to entities now understood to be Gupta-related totaling approximately R94 million (approximately USD 6.8 million)".

Following an internal probe, SAP said it was launching disciplinary proceedings against three employees and that it would scrap sales commissions on all public sector contracts in countries with a poor anti-corruption rating.

SAP commissioned law firm Baker McKenzie to investigate allegations that its South African office paid kickbacks to the Guptas to gain business from state-owned enterprises (SOEs).

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Revelations contained in the #GuptaLeaks emails revealed that giant German software group SAP agreed to pay 10% "sales commission" to a company controlled by the Guptas in order to clinch Transnet business.

"The amounts actually paid to the third parties totalled approximately R107m because, by contract, each commission payment included an amount of VAT [value added tax] for taxes due on the receipt of the funds".

Corruption allegations surrounding the ANC-connected Guptas ensnared one of Germany's biggest companies as SAP SE joined global businesses ranging from KPMG LLP to McKinsey & Co in reporting links with the family.

An investigation by the U.S. Department of Justice and the U.S. Securities and Exchange Commission is ongoing and the company will fully cooperate, SAP said.

On Tuesday, the German software giant released a statement saying it has reported alleged misconduct in its South African operations to U.S. authorities.

SAP admitted to paying millions to a Gupta-linked company that assisted it with contracts with Eskom and Transnet.

Other reports by Guamnewswatch

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