Only dead fish go with the flow
19 January 2018 19:36 (South Africa)
South Africa

#GuptaLeaks: SAP execs suspended as probe launched into Gupta kickbacks

  • Jillian Green
    Jillian Green

    Jillian Green is Daily Maverick Managing Editor.

  • South Africa
Photo: Ajay and Atul Gupta

Members of the South African management team of German software group SAP have been placed on “administrative leave” and a senior board member is en route to the country to launch an investigation into several contracts awarded by SAP South Africa. By JILLIAN GREEN.

The suspension follows revelations contained in the GuptaLeaks emails that show that in order to clinch Transnet business, SAP agreed to pay 10% “sales commission” to a company controlled by the Guptas.

On Monday, AmaBhungane and Scorpio revealed that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company that specialises in selling 3D printers.

The terms suggest a thinly disguised kickback arrangement: If the Gupta company was the “effective cause” of SAP landing a Transnet contract worth R100-million or more, it would get 10%.

In the year to follow, SAP paid the company, CAD House, a whopping R99.9-million, suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies.

It was further revealed through the leaked emails that confidential SAP contracts were forwarded to the Guptas.

SAP South Africa denied it paid kickbacks or was party to laundering the payments, arguing that CAD House had “the necessary skills in terms of positioning our solution” and was paid a sales commission for acting as “an extension of the sales force”. It also threatened to take legal action against Amabhungane and Daily Maverick.

Neither CAD House nor the Gupta family responded to detailed questions sent to them by Amabhungane and Daily Maverick earlier.

In a statement released on Wednesday the German-based company said the media reports had raised questions surrounding contracts and third-party business practices in South Africa.

“SAP rigorously investigates any allegations of wrongdoing in any of the more than 180 countries where it operates,” it said, adding that it had launched an internal review and “and will make the results of the investigation public once it is concluded”.

The investigation will be spearheaded by a multi-national law firm and overseen and overseen by Executive Board Member Adaire Fox-Martin.

“Consistent with company policy, SAP has brought in senior expert staff across all relevant functions while the current management team has been placed on administrative leave pending the findings of the review,” the statement read.

The statement did not reveal the identities of the senior managers who had been placed on leave.

“SAP stands for integrity, transparency and compliance,” said Fox-Martin, who leads SAP’s business in EMEA (Europe, Middle East and Africa) and Greater China. “We will not tolerate any misconduct.”

Speaking to Reuters, Fox-Martin said the company was taking the allegations  “very, very seriously”. DM

  • Jillian Green
    Jillian Green

    Jillian Green is Daily Maverick Managing Editor.

  • South Africa

Get overnight news and latest Daily Maverick articles

Reader notice: Our comments service provider, Civil Comments, has stopped operating and will terminate services on 20th Dec 2017. As a result, we will be searching for another platform for our readers. We aim to have this done with the launch of our new site in early 2018 and apologise for the inconvenience.