File image: Multinational software company SAP faces a kickback scandal. IOL.

CAPE TOWN - German software giant, SAP has willingly divulged the situation in its South African business to US authorities responsible for enforcing the US Foreign Corrupt Practices Act. 

The company admits to paying a kickback for an SOE contract. The catastrophic revelation has allegedly been disclosed to authorities. We take a closer look at the embattled software giant and their involvement in the Gupta-linked saga. 



SAP Africa announced an interim management team for Africa after four management members were placed on administrative leave. 

This follows the investigation of one of its contracts which was pending forensic investigation. 

The business-related decision was to ensure that it is business as usual for the rattled company. 

"It is important to us that all SAP staff, clients, and partners have the support they need, and that business continues uninterrupted. We have appointed a strong leadership team to ensure our usual standards of service and strategic support are upheld", said Acting Managing Director of SAP Africa, Claas Kuehnemann. 


The #Guptaleaks which leaked confidential information pertaining to illicit business dealings, linked an additional 3 companies to the corruption scandal. 

Reports revealed that in order for the German headquartered company to clinch a deal with Transnet, they allegedly agreed to pay a "10% sales commission" to a Gupta-linked company. 

Notably, embattled audit firm KPMG and global consultancy company, McKinsey were the remaining companies linked to the Gupta corruption scandal. 


SAP fought back to prior allegations of a "10% sales commission" agreed to be paid to a Gupta-linked company. 

The software giant launched an internal review and announced that the results of the investigation will be made public after the investigation concludes. 

"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", said Fox-Martin who oversees the SAP region. 


Reports suggested that South Africa could have 'milked' billions of rands in what appeared to be a collusion between the notorious Gupta family and leading private and state owned companies. 

This allegation followed South Africa's downgrading to "junk status" by global credit rating agencies. 

The county's economic path was worrying as it appeared to be headed on a perilous path. 

International companies linked to the deals account for approximately R1.5 billion for the ABB contract. 


SAP shrugged off the latest corruption scandal claims 

"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", said Fox-Martin. 


The software company faced harrowing criticism and legal action by the Democratic Alliance for their alleged kickback scandal. 

"The DA will lay charges of money laundering and corruption against the South African component of global software giant, SAP, and Gupta-affiliated company CAD House, following allegations of R100 million in kickbacks changed hands between the two companies", said the DA’s shadow minister of Public Enterprises, Natasha Mazzone. 


SAP announced a new executive team in Africa, following the circulation of corruption claims. 

This was announced two days after the software giant put four senior managers on leave, pending its investigations into allegations that it was involved in a government bribery scheme.

New management team

- Ashley Boag as acting chief operating officer

- Peter David, chief financial officer for SAP EMEA and now acting CFO for Africa

- Local ICT industry veteran Pieter Bouwer as South African MD

-  Claas Kuehnemann as acting managing director: SAP Africa


SAP has announced that it would provide an update on the investigation into allegations of wrongdoing in its South African business during the last week of October, 2017. 

The company said it had initiated an investigation, spearheaded by international law firm Baker McKenzie on July 12, 2017. 

The team from Baker McKenzie has been reviewing and scrutinising large volumes of data, talking to a variety of stakeholders and conducting interviews with all relevant persons, it said. 

"We are acutely aware that we owe South Africa answers", it said. 


South African lender, Standard Bank is reportedly considering whether to cut ties with its IT software supplier Germany's SAP and consultant McKinsey. 

Meanwhile, the Guptas and Zuma have denied any wrongdoing.

"We will not continue these relationships unless we receive satisfactory explanations and are certain that necessary and proportionate remedial action is being taken", Standard Bank said in statement.


It then emerged today that German software company SAP allegedly admitted to paying a kickback to secure a lucrative contract with state owned enterprises (SOEs).

It is reported that SAP knew as far back as July 15 that they paid  a commission to secure contracts. The Gupta linked companies are allegedly linked to SOEs Transnet and Eskom.

This comes after the medium term budget policy statement was delivered yesterday by Minister of Finance, Malusi Gigaba. 

The MTBPS revealed that the country's growth outlook slashed from 1.3% to 0.7%. 

Earlier on Thursday, Gigaba speaking at a Business Report post budget breakfast said that political uncertainty was hurting the economy. He said that corruption in SOE's also posed a serious threat to the economy.


SAP has released a full statement on the SOE kickback scandal they are facing. The statement addresses disciplinary measures and process changes.