German company SAP admits to paying commission for SOE contract

German software giant SAP SE said on Thursday it has reported its Gupta-linked accounts to United States authorities for further investigation.

Adaire Fox-Martin, SAP executive board member in charge of global customer operations.

SAP said it has "initiated disciplinary procedures against three employees and made significant changes to its global sales deal processes".

However, it did find "indications of misconduct" related to the management of third parties related to Gupta businesses - the Gupta family is known to have strong links to South African president Jacob Zuma.

The Baker McKenzie probe identified issues tied to two Transnet deals and two Eskom deals worth about R660 million, on which SAP paid as much as R107 million in sales commissions to Gupta-family entities.

United States law firm Baker McKenzie has been contracted by SAP to investigate the public-sector business in South Africa going back to 2010.

The German business software giant SAP said Thursday that it has disciplined some of its employees and made major changes to its sales processes, in connection with yet another Gupta-related corruption scandal in South Africa. The Guptas and Mr. Zuma have denied wrongdoing.


SAP said the investigation, which focuses on Transnet and Eskom, will be concluded by the end if the year.

"We can not emphasize enough how seriously the SAP Executive Board takes these allegations, or how committed we are to managing this process in a transparent, ethical and responsible way", Fox-Martin added. This includes SA, whose rating is 45.

Fox-Martin said SAP had made its voluntary disclosure to the USA authorities in July, shortly after the allegations hit.

The probe began after SAP's outside law firm Baker McKenzie informed U.S. authorities in July, shortly after the potential government bribery scheme had come to light in reports by a local investigative reporting group.

Investigations by amaBhungane found that CAD House was run as a subsidiary of the Gupta-owned Sahara Computers; and it became apparent that it was chosen because of the family's close links to government officials. SAP has also invoked its third-party audit rights with entities understood to be Gupta-related - and these audits are in the early stages.

Extra legal compliance staff will be added to the SAP Africa market unit, and it said it would "strengthen" the compliance committee in the region.

"In connection with these four contracts, SAP provided software and received revenue totaling approximately R660 million, and paid commissions to entities now understood to be Gupta-related totaling approximately R94 million", it said. They will be based in South Africa and report into SAP's Global Compliance organization.

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