Johannesburg - German software giant SAP SE said on Thursday it has reported its Gupta-linked accounts to US authorities for further investigation.
SAP said it has disclosed its situation in its South African business to US authorities, and initiated disciplinary procedures against three employees. It is however, not currently working with South African authorities.
The firm has also removed commission on public sector deals in higher-risk countries including South Africa, and made significant changes to its global sales deal processes.
SAP’s investigation, which has not run its full course, uncovered indications of misconduct in issues relating to the management of Gupta-related third parties.
But to date, SAP stated, the investigation has not revealed any evidence of a payment to South African government officials, including Transnet and Eskom employees.
Commenting on the US investigation, SAP head of investigations and global compliance Philipp Klarmann said SAP started the process by phoning the US's department of investigation about what the probe had found. Several meetings ensued where the finding of the investigation has been discussed.
"It is a tense process, and it is not done," he said. "But SAP have opted to take the collaborative approach.This is an ongoing, continuous discussion."
Adaire Fox-Martin, member of the SAP executive board, who leads the company’s business in EMEA, MEE and Greater China, confirmed that SAP has not had dealings with the South African authorities presently regarding the wrongdoing the probe has found.
But Klarmann said there was different obligations in different jurisdictions.
"SAP is very active globally," he said. We had to report this to US authorities."
SAP have not said they will disclose to the South African authorities, they just have not made decision on their approach, Klarmann said.
SAP initiated the investigation, spearheaded by international law firm Baker McKenzie, on July 12 2017 into allegations that it paid a Gupta front company R100m in "kickbacks" for state business.
At the same time, it placed four senior executives on administrative leave pending the finalisation of this investigation. However, only three employees are being disciplined because the probe did not find any evidence that showed the fourth employee were involved with Gupta-linked activities.
SAP said the investigation, which focuses on Transnet and Eskom, will be concluded by the end if the year.
The investigation was sparked by an Amabhungane report that found SAP paid a 10% “sales commission” to a company controlled by the Guptas to clinch business from Transnet . Evidence fought by the investigative unit showed that Gupta-linked CAD House was deliberately interposed to obscure Gupta involvement and to launder the proceeds to them.
The Baker McKenzie preliminary findings confirmed that misconduct relating to the sales commission did happen.
The firm said it voluntarily disclosed the situation in its South African business to the US authorities responsible for enforcing the US Foreign Corrupt Practices Act.
“As a global company with a commitment to integrity and compliance, the past three months have been humbling for us,” said Fox-Martin.
“The allegations of wrongdoing in our South African business have had a profound impact on our employees, customers and partners, and on the South African public — and we apologise wholeheartedly for this.”
Fox-Martin said the company is committed to full and complete cooperation with the US Department of Justice and the US Securities and Exchange Commission. She confirmed that the investigation by these two bodies is continuing.
“We cannot emphasise 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 said.
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