SAP has dispatched executive board member Adaire Fox-Martin from Germany to South Africa to address concerns of customers, partners and employees amid allegations that the software giant paid a “Gupta front” R100-million in “kickbacks” for state business.
In a statement on Thursday, SAP said it had initiated an independent investigation spearheaded by a multinational law firm and overseen by Fox-Martin to vigorously review contracts awarded by SAP South Africa.
Media reports suggest that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company that specialises in selling 3D printers.
The Daily Maverick reported that the “terms suggest a thinly disguised kickback arrangement – if the Gupta company were the “effective cause” of SAP landing a Transnet contract worth R100-million or more, it would get 10%.
According to the report, SAP paid the company, CAD House, a whopping R99.9 million, suggesting the software giant used “the Gupta influence network” to drive sales of a billion rand to Transnet and other state-owned companies.
In the same report, SAP denied it had 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”.
However, on Thursday, SAP said it had launched an internal review as part of its utmost commitment to compliance and would make the results of the investigation public once it was concluded.
“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,” said the statement issued by Adam Hunter, media relations manager: Africa.
“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 strive to be exemplary in the manner in which we serve our customers and partners, and in how we treat our employees. Full transparency and integrity are imperative at our company, and we will not tolerate any misconduct.”