SAP suspends SA execs over ‘R100m kickbacks’ for Gupta front | Fin24
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SAP suspends SA execs over ‘R100m kickbacks’ for Gupta front

Jul 13 2017 08:33
Matthew le Cordeur, with Carin Smith

Cape Town – Software multinational firm SAP has suspended South Africa’s management team after a #GuptaLeaks exposé by AmaBhungane and Scorpio revealed it allegedly paid a Gupta front R100m in kickbacks for state business.

SAP has initiated an independent external investigation as well as an internal probe into the matter.

The current management team has been placed on leave pending the findings of the review, SAP said in a statement on Wednesday.

SAP didn't name the individuals, but Fin24 understands the team includes Brett Parker (MD Africa), Lawrence Kandaswami (MD South Africa), Deena Pillay (CFO South Africa) and Mehmood Khan (COO Africa).

“SAP has initiated an independent investigation spearheaded by a multinational law firm and overseen by executive board member Adaire Fox-Martin to vigorously review contracts awarded by SAP South Africa,” the firm said.

“SAP has also launched an internal review as part of its utmost commitment to compliance and will make the results of the investigation public once it is concluded.

“Full transparency and integrity are imperative at our company, and we will not tolerate any misconduct,” said Fox-Martin, who is coming to South Africa to address the concerns of customers, partners and employees.

"As a company we're initiating a very thorough and very vigorous investigation," she told Reuters.

SAP said the media reports raised questions surrounding contracts and third-party business practices in the country. “SAP rigorously investigates any allegations of wrongdoing in any of the more than 180 countries where it operates,” it said.

SAP SA strongly rejected allegations of kickbacks on Tuesday.

AmaBhungane and Scorpio revealed that in August 2015, SAP signed a “sales commission" agreement with CAD House, what they call "a small Gupta-controlled company that specialises in selling 3D printers".

In the view of the investigative units, the terms suggest "a thinly-disguised kickback arrangement: If the Gupta company were the 'effective cause' of SAP landing a Transnet contract worth R100m or more, it would get 10%".

SAP ended up paying CAD House R99.9m, which to the units suggest that SAP "used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies".
In a statement, SAP said the accusations made around the use and payment of subcontractors are unfounded and unsubstantiated.

"SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest global compliance and legal standards," according to the statement.

"As part of its day to day business, SAP SA engages various subcontractors, SMEs and partners and it has always been and will continue to be SAP’s policy to partner with a wide pool of organisations that qualify for our partner programme, if those organisations successfully meet the exacting criteria of our global due diligence and certification processes."

SAP said it has taken strong exception to the allegations and is investigating possible action.

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