Germany's SAP in damage control after SA corruption scandal

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Cape Town - Scandal riddled German multinational software group SAP on Thursday 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 short-change 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 Gupta-owned 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.

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 82percent 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.

BUSINESS REPORT ONLINE