Paula Luckhoff11 January 2024 | 17:11

Software giant SAP to pay SA R2bn in restitution for Gupta-era corruption

The German-based software company was first implicated in Gupta-linked corrupt contracts in 2017. And it owes South Africa more than restitution alone, says economist Dr Iraj Abedian.

Software giant SAP to pay SA R2bn in restitution for Gupta-era corruption

Software giant SAP will pay more than R4 billion (over $220 million) to resolve investigations led by US authorities into schemes to pay bribes to government officials in South Africa and Indonesia. Picture: © moovstock/123rf.com

The Money Show interviews economist Dr Iraj Abedian, CEO of Pan-African Investment & Research Services.

Software giant SAP will pay more than R4 billion (over $220 million) to resolve investigations led by US authorities into schemes to pay bribes to government officials in South Africa and Indonesia.

The multi-national software company was first implicated in Gupta-linked corrupt contracts in 2017, when the #GuptaLeaks were published.

The National Prosecuting Authority (NPA) says SAP will pay R2.2 billion in "restitution" to South African state entities and government departments.

The probes here and in the US were coordinated, involving the US Justice Department and the Securities and Exchange Commission (SEC) along with the NPA locally.

In terms of the Resolution (concluded with SAP), SAP Global admits to the criminal actions of certain former executives and managers of SAP South Africa in corruption and related offences.

These included tainted contracts with state-owned entities like Transnet, Eskom, SARS, PRASA and the Department of Water and Sanitation.

RELATED: SAP becomes latest multinational ordered to 'pay back the money'

In addition to the repayment, disclosure and cooperation provisions, the Resolution obliges SAP to commit to a local and international corporate compliance programme to prevent further corrupt practices, the NPA says.

Is this a satisfactory outcome, wonders Bruce Whitfield.

He poses the question to economist Dr Iraj Abedian (CEO of Pan-African Investment & Research Services), a long-time campaigner for accountability from the companies who enabled state capture.

RELATED: Firms that enabled state capture should pay reparations - Dr Iraj Abedian

While the restitution agreement is a good step, he absolutely does not believe that it is satisfactory says Dr Abedian.

'The first of what I believe is a three-step package has been achieved... that is admission of guilt.'

To illustrate his point, the economist uses the example of someone breaking your house down to steal your laptop - if your device is returned, that is but a fraction of the cost of having your house broken down, he points out.

There need to be three steps: one is what have you stolen, the so-called restitution to pay back what you have stolen. Secondly, you need to pay the collateral damage that has been imposed on the South African economy that has cost us and is costing us as we speak... that is a much larger number...

And thirdly, there should be a disclosure - who were the recipients, what were their positions, and what measures are we going to take, in that process, to make sure that SAP doesn't do it again, or KPMG and the others don't do it again.

More importantly, he believes, if nothing else the SAP case has highlighted the need for a national coordinated campaign in this regard.

We need to have a national coordinated **campaign**_, _a national project if you like, to bring all SAPs and KPMGs into a package of, not restitution alone, but compensation... a fair and equitable compensation without which we'll be stuck in this damaged economy for another two,three generations. This highlights that it can be done, it should be done, and it should be the number one priority of the South African nation irrespective of political orientation.