SAP rejects allegations of Gupta kickbacks
An amaBhungane and Scorpio investigation says that in order to clinch Transnet business, SAP agreed to pay 10% “sales commission” to a company controlled by the Guptas.
JOHANNESBURG - Software company SAP has denied paying kickbacks to a Gupta-linked company and says it is now investigating possible action into the media reports.
An amaBhungane and Scorpio investigation revealed on Tuesday that in order to clinch Transnet business, SAP agreed to pay 10% “sales commission” to a company controlled by the Guptas. The evidence suggests the company – a little-known outpost of the Gupta empire – was deliberately interposed to obscure Gupta involvement and to launder the proceeds to them.
SAP describes the Gupta leaks report as unfounded.
SAP Africa MD Brett Parker says the company "strongly rejects allegations of kickbacks recently made by some South Africa-based media".
"The accusations made around the use and payment of subcontractors are unfounded and unsubstantiated.
"SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest global compliance and legal standards.
"As part of its day to day business, SAP South Africa engages various subcontractors, SMEs and partners and it has always been and will continue to be SAP’s policy to partner with a wide pool of organisations that qualify for our partner programme, if those organisations successfully meet the exacting criteria of our global due diligence and certification processes," says Parker.
"SAP has taken strong exception to the reports issued in the media today, and is investigating possible action."
The AmaBhungane and Scorpio probe states that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company that specialises in selling 3D printers.
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%.
In the year to follow, SAP paid the company, CAD House, a whopping R99.9 million, suggesting SAP used the Gupta influence network to drive sales of R1 billion to Transnet and other state-owned companies.
Meanwhile, amaBhungane journalist Susan Comrie says she is surprised by SAP’s response.
“We interviewed SAP’s local officials about this. We interviewed both senior executives from SAP in South Africa. They admitted to paying this money and entering into a sale agreement with this company.”