Special Tribunal orders SAP to repay government over R413 million

A Special Tribunal has ordered multinational software company, Systems Applications Products (SAP), to repay the Department of Water and Sanitation (DWS) more than R413 million.

This after the Special Tribunal on Tuesday declared software license and support agreements between SAP and the DWS, concluded between 2015 and 2016, constitutionally invalid and set them aside.

The German software company was ordered to repay R263 million to government within the next four days.

The Special Tribunal order followed an intensive investigation by the Special Investigating Unit (SIU) into the affairs of the DWS.

The investigation revealed that the department irregularly awarded the software license and support agreements, to the values of over R1 billion, to SAP.

Evidence of wrongdoing

SIU spokesperson Kaizer Kganyago on Wednesday said the unit had confronted the DWS and SAP with evidence of wrongdoing, and by agreement, the SIU together with the department and SAP agreed the contracts entered into were invalid and unlawful.

The settlement agreement was confirmed by the Special Tribunal on Tuesday, and signed by the judge as an order of the court.

When the SIU first began with its investigations, Kganyago said the DWS had paid SAP R413 million but the unit was able to block almost R600 million from being paid to the company.

“We went to them with evidence to show that the contract was not entered into in a proper manner, and they didn’t want to go to court because they knew what they had done was wrong,” Kganyago told Newzroom Afrika on Wednesday.

“They admitted and wanted to pay back the money, and that’s how we got to this settlement,” he added.

Repayments

Kganyago explained how the repayments by SAP were calculated.

“We’re expecting them to pay us the amount that is not disputed of about R263 million in the next four days, because it was five days from yesterday [Tuesday]. And then from there, the remainder of the money was the license payments which they needed to do, which is about R68 million.  

“The R83 million that is left, they’ve got to prove what they have done with the money [and] if it was used for proper things. If it was not, a portion of that money will have to be paid back to the department.”

Kganyago said the matter was referred to the National Prosecuting Authority (NPA) for prosecution due to collusion between SAP and DWS officials.

The Special Tribunal also ordered the department not to use any of the software licensed under the 2015 and 2016 license agreements.

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