Global software giant SAP admits payments to Guptas

Global software giant SAP has confirmed paying R107-million to companies it now understands to be linked to the Gupta family and has reported itself to the US Department of Justice.

The company maintains, though, that an internal probe revealed misconduct only by its management.

SAP said it had put in place a policy whereby it would stop all "sales commission" payments in countries with a Corruption Perception Index score of less than 50. South Africa has a score of 47.

The company has labelled payments to Gupta companies as "sales commissions" on deals with state-owned companies Eskom and Transnet, worth R660-million.

The Gupta companies in question are CAD House and Global Softech Solutions, entities leaked Gupta e-mails have revealed were controlled by the Gupta family. In July, media reports revealed the two companies benefited from about R100-million in alleged kickbacks for assistance in securing the deals, an allegation SAP has consistently denied.

SAP on Thursday confirmed at a press briefing in Johannesburg that the US Justice Department had launched a full-scale investigation following a "voluntary disclosure" by SAP, but would not discuss the scope of the probe, saying it was ongoing.

The company is listed on the New York Stock Exchange and could face penalties under the Corrupt Foreign Practices Act, enforced by the FBI, if criminal wrongdoing is discovered.

Hawks spokesman Brigadier Hangwani Mulaudzi confirmed on Thursday that the Hawks were co-operating with the FBI.

SAP said they had had no interaction with South African or German authorities to date.

Meanwhile, an internal probe by law firm Baker McKenzie is nearing completion, said the SAP co-president of global customer relations, Adaire Fox-Martin.

"The investigation has unearthed no evidence of any payments to South African government officials, including Eskom and Transnet employees," Fox-Martin said.

When The Times pointed out it was never alleged that SAP had directly paid any officials or SOE staff but had, in fact, brought the Gupta companies on board to secure the deals, Fox-Martin declined to comment further.

She said the internal probe had resulted in disciplinary action against three employees. A fourth had been cleared.

SAP concluded four contracts of sale, two each to Eskom and Transnet, between December 2014 and November 2016, each with the "assistance" of entities "currently understood to be Gupta-related", the company said.

Transnet on Thursday welcomed the statements by SAP, saying it had preliminarily exonerated Transnet of wrongdoing, leaving the SOE with a feeling of "relief and encouragement". Eskom said it would study the statement before commenting.

Fox-Martin said SAP concluded two additional software contracts in which no commission had been paid.

SAP said it had initiated a clause in its contracts that enabled it to audit third parties, particularly the Gupta-linked companies it did business with.

Philipp Klarmann, head of investigations for the SAP Global Compliance Office, could not immediately confirm if the audits, which Fox-Martin indicated were at an early stage, would encompass all Gupta companies. "We will go as far as the contracts allow us to go," he said.

So far, says SAP, Baker McKenzie has completed reviews of just over 180 000 documents in its inquiry and has conducted numerous interviews.

The law firm, which has focused on Transnet and Eskom contracts, will continue to look at all public-sector business SAP has done since 2010.

The SAP Africa unit will be grown to include more legal compliance staff and the SAP Africa Compliance Committee will also receive additional members, in an attempt to increase the level of scrutiny on all contracts.