Ger­many’s SAP in dam­age con­trol after SA cor­rup­tion scan­dal

The Star Early Edition - - COMPANIES - Ka­belo Khu­malo

SCAN­DAL rid­dled Ger­man multi­na­tional soft­ware group SAP yes­ter­day moved to shrug off its lat­est cor­rup­tion scan­dal as it sus­pended its key ex­ec­u­tives in South Africa and launched an in­de­pen­dent in­ves­ti­ga­tion into re­ports that it col­luded with the Gupta fam­ily to short­change Transnet.

The com­pany said the in­quiry into its deal­ings with the Gupta fam­ily and other con­tracts awarded by its South African unit would be spear­headed by the yet un­named multi­na­tional law firm and over­seen by its ex­ec­u­tive board mem­ber Adaire Fox-Martin.

Fox-Martin, the head of SAP’s busi­ness in EMEA (Europe, Mid­dle East and Africa) and Greater China, said that the com­pany was con­cerned by me­dia re­ports that raised ques­tions sur­round­ing con­tracts and third-party busi­ness prac­tices in South Africa.

Re­view

“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.”

“The com­pany’s busi­ness pol­icy is to carry out all com­pany ac­tiv­i­ties in ac­cor­dance with the let­ter and spirit of ap­pli­ca­ble le­gal re­quire­ments and there­fore main­tain the high­est stan­dards of busi­ness ethics. SAP strongly ad­heres to its Global Code of Busi­ness Con­duct and is com­mit­ted to fol­low­ing dis­ci­plined and trans­par­ent trans­ac­tions,” Fox-Martin said.

The com­pany is one among a plethora of multi­na­tion­als that have been caught in the ever en­su­ing cor­rup­tion and state cap­ture scan­dals sur­round­ing the in­fa­mous Gupta fam­ily.

Me­dia re­ports have sug­gested that SAP paid a Gup­taowned com­pany R100 mil­lion in kick­backs to a com­pany owned by the fam­ily for help­ing it score R1 bil­lion in gov­ern­ment con­tracts with the state-owned rail, port and pipe­line com­pany.

The com­pany’s sus­pended head of its South African busi­ness, Brett Parker, has pre­vi­ously re­futed the al­le­ga­tions call­ing them base­less.

How­ever, Fox-Martin, who is head­ing for South Africa to deal with the al­le­ga­tions, said the com­pany was con­cerned about the me­dia re­ports that had emerged about the com­pany’s con­duct in South Africa.

“The com­pany’s busi­ness pol­icy is to carry out all com­pany ac­tiv­i­ties in ac­cor­dance with the let­ter and spirit of ap­pli­ca­ble le­gal re­quire­ments and there­fore main­tain the high­est stan­dards of busi­ness ethics.”

How­ever, this would not be a first cor­rup­tion to hit the Ger­man gi­ants in re­cent times. Last year, the group set­tled for $3.9m (R52.16m) to set­tle a Panama gov­ern­ment bribery case, where one of its ex­ec­u­tives was found to have paid bribes to of­fi­cials in the Panama gov­ern­ment to land lu­cra­tive state con­tracts.

At the cen­tre of the bribery was to sell SAP’s soft­ware at dis­counts of up to 82% through an SAP part­ner in Panama.

The ex­ec­u­tive’s scheme was thought to have run from at least 2009 to 2013.

At the cen­tre of the bribery was to sell SAP’s soft­ware at dis­counts of up to 82 per­cent through an SAP part­ner in Panama with the in­ten­tion to build up a slush fund to pay for bribes.

The Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) had charged the com­pany with vi­o­lat­ing pro­vi­sions of the For­eign Cor­rupt Prac­tices Act.

How­ever, the com­pany set­tled the mat­ter with­out ad­mit­ting or deny­ing the find­ings SEC.

Dis­graced former Panama Pres­i­dent Ri­cardo Martinelli was fin­gered as one of the sev­eral al­leged con­spir­a­tors in the SAP scheme while SAP was ac­cused by the SEC of hav­ing de­fi­cient in­ter­nal con­trols to curb bribery pay­ments.

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