Why the SIU is going after German tech company SAP

18 November 2022 - 13:26
By Kgaugelo Masweneng
The SIU wants to have the Eskom contract landed by SAP declared unlawful.
Image: Olivier Le Moal The SIU wants to have the Eskom contract landed by SAP declared unlawful.

The Special Investigating Unit (SIU) says a German technology company bribed the Guptas to obtain a lucrative Eskom contract.

The SIU wants the Special Tribunal to declare unlawful the contract it says was irregularly awarded to SAP by Eskom through Gupta shell company CAD House.

The approximately R1bn contract was awarded for three years and three months in 2016.

In his affidavit, principal SIU forensic investigator Richard Allie said it was awarded due to a corrupt relationship between the implicated parties.

“SAP paid approximately R73m of the money it received ... to CAD. CAD in turn made payments to other Gupta front companies,” said Allie.

“SAP secured the contract in circumstances where there was already an agreement in place [to provide services] SAP sought to provide. [This] was due to expire in 2017. A number of the products purchased by Eskom were not used by it, they were not validly approved by Eskom, and approval was not obtained from National Treasury.”

The unit wants SAP to return the money to the power utility.

“Eskom incurred fruitless and wasteful expenditure in respect of the enabling and cloud services agreement in the amount of R385m (comprising R371m for unused licences and R13m for the unimplemented success factor),” said the SIU.

The alleged bribes from SAP for contracts extend to Transnet and other state-owned entities.

Allie said the unit was not aware of evidence that CAD had influence within Eskom.

“The overwhelming probability is the influence used was that of the Guptas, who at that stage owned 50% of CAD,”  he said.

“SAP could not have genuinely believed CAD had a deep understanding of customer processes in relation to Eskom and Transnet, and assisted with the building of value for SAP.

“Ultimately, at the time of the conclusion of these agreements, Eskom’s CFO was already allied with the Guptas. Put differently, Eskom was being controlled by the Guptas.

“For SAP to secure an agreement with Eskom, it paid R73m to a Gupta-controlled company. As a result of [this], it secured a contract to supply goods and services for which it was paid R1bn.

“I submit that the facts show SAP paid a bribe to the Guptas, through CAD, to obtain a lucrative contract with Eskom.”


Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.