Right of reply: SAP “strongly rejects” R100m Gupta kickback reports

Press statement from SAP Africa

By Brett Parker*

SAP 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.

Read more: Corrupt SAP exposed. Gupta bribery to pull in US, German authorities.

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.

SAP has taken strong exception to the reports issued in the media today, and is investigating possible action.

  • Brett Parker is Managing Director for SAP Africa

SAP Paid Firm Linked to South African President’s Son for Deals

By Franz Wild

(Bloomberg) — Global business software maker SAP SE’s South African unit agreed to pay a 10 percent commission to a company in which President Jacob Zuma’s son has an indirect stake in exchange for help in winning contracts from the country’s national railway and ports company, documents show.

SAP
SAP

SAP South Africa agreed to pay CAD House, which is partly owned by Duduzane Zuma and members of the Gupta family, about 100 million rand ($7.8 million) in exchange for “obtaining customer consent” and getting the “requisite signatures” from state-owned Transnet SOC Ltd., according to an August 2015 copy of an agreement between SAP and CAD House seen by Bloomberg News.

The papers are part of a trove of documents known as the Gupta Leaks. The amaBhungane Centre for Investigative Journalism first reported the events based on the documents.

SAP said CAD House had the necessary skills to position its solution and that it paid the sales commission for acting as an extension of the sales force.

“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 program, if those organisations successfully meet the exacting criteria of our comprehensive global due diligence and certification processes,” SAP said in an emailed response to questions from Bloomberg.

The emails and other data posted by amaBhungane are part of a series of documents that have revealed how companies controlled by South Africa’s Gupta family have won billions of rand worth of contracts from state-owned companies and how the three brothers have influenced government decisions through their closeness to President Zuma. As a result, there have been no-confidence votes in parliament, which Zuma has survived.

Holding Structure

CAD House is controlled through a series of companies that bring together the Gupta family, employees of that family’s businesses in South Africa and Duduzane Zuma, shareholding documents show. CAD House is wholly owned by Sahara Systems. That company is in turn 80 percent owned by Gupta employees and 20 percent by Sahara Holdings. Zuma, through two other companies, owns 24 percent of Sahara Holdings, while another 73 percent of the company is held by the Guptas, records show.

Duduzane Zuma, Gupta family spokesman Gary Naidoo, and President Zuma’s spokesman Bongani Ngqulunga didn’t return calls to their mobile phones. CAD House didn’t answer calls and didn’t respond to emails.

Duduzane Zuma

Transnet said it has been doing business with SAP since 2000. It never worked with CAD House, nor does it work through third parties, Transnet said in an emailed statement to Bloomberg.

CAD House was tasked with alerting SAP to any opportunities, according to the agreement. After the contract was signed, SAP paid CAD House 99.9 million rand as a sales commission, documents show.

CAD House is a 3D printer business, with revenue of roughly 20 million rand per year. Sahara Systems bought CAD House in 2014, according to a Sahara presentation.

The agreement between SAP and CAD House states that CAD should not make any payments to any politically connected individuals on behalf of SAP.

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