SAP Gupta update: Probe into Transnet, Eskom deals to be concluded in Jan 2018

By Gareth van Zyl*

JOHANNESBURG — SAP expects a probe into sales commissions it paid a Gupta-linked company – which helped the global software giant secure business with Transnet and Eskom – to be concluded next month.

International law firm Baker McKenzie is conducting the investigation on behalf of SAP. The investigation is separated into probes looking into the software company’s transactions with Transnet and Eskom, its public sector business and its business in general in the country.

In terms of its broader scope, the probe is looking at deals that date as far back as 2010 in South Africa. The results of this broader probe are not near completion yet, but the company has told BizNews that results of its investigations specifically into its 2015 Transnet and Eskom deals will be made public next month.

“SAP will be able to provide you with further information in this regard, when it has concluded the Eskom and Transnet investigation, which we anticipate to be in mid to late January 2018,” Ansophie Strydom, SAP’s head of communications in South Africa, told BizNews.

Spokespersons for SAP further told BizNews that three of the company’s South African managers implicated in the saga remain on suspension pending a disciplinary hearing expected to take place in January. A fourth manager, who was previously suspended, is back at work after not being found to be implicated in the Gupta deals.

Timeline of SAP’s Gupta saga

Amid revelations from the Gupta email leaks, SAP came under fire in July this year for paying millions of rands to Gupta-linked 3D printing software business, CAD House, in order to win lucrative deals with state-owned firms like Transnet.

An amaBhungane report in July revealed how CAD House was merely a front used by the Guptas as part of the family’s alleged money laundering scheme.

At a press conference on October 26, SAP revealed that shortly after the amaBhungane story broke, the company moved to approach the US Department of Justice (DoJ) and the Securities Exchange Commission (SEC) in a voluntary disclosure regarding the Gupta deals.

#GuptaLeaks. More of Zapiro’s magic available on his website www.zapiro.com.

This development meant that the DoJ would have at least two separate Gupta-linked investigations on its desk. London’s Financial Times reported in October that the FBI is investigating two Gupta nephews for alleged money laundering. The progress of both of these investigations is not known.

The drama around the Gupta deal resulted in SAP moving to remove commissions on public sector deals in higher-risk countries, including South Africa.

SAP, in its October statement, further detailed how much it paid Gupta-linked companies regarding the sales commissions in question.

“SAP provided software and received revenue totalling approximately R660 million (approximately $48 million), and paid commissions to entities currently understood to be Gupta-related totalling approximately R94 million (approximately $6.8 million). The amounts actually paid to the third parties totalled approximately R107 million (approximately $7.7 million) because, by contract, each commission payment included an amount of VAT for taxes due on the receipt of the funds,” SAP revealed in its press statement in October.

Meanwhile, responding to an open letter by BizNews in September this year regarding the lack of clarity over SAP’s Gupta probe, the company’s chair Hasso Plattner promised decisive action on the matter pending results from its investigation.

Hasso Plattner.
Hasso Plattner. (Michael Krigsman Flickr)

“I can guarantee you that we will turn over every leaf in order to find out what happened or didn’t happen,” Plattner wrote.

“The business ethics of SAP are clearly stated and there is no room for deviation. As soon as the facts are on the table, the SAP Supervisory Board will meet and discuss the consequences,” he added.

More details on SAP’s Gupta deal

BizNews has discovered a copy of SAP’s contract with Gupta-linked CAD House amid the tranche of emails dubbed the ‘Gupta Leaks’.

The contract, which is dated September 30 2105, is labelled as an appendix to SAP’s “sales commission agreement” between SAP and CAD House cc (closed corporation).

The document is thin on detail but indicates certain promises made on behalf of SAP, such as what percentage of the full commission SAP would pay to CAD House if the deal with Transnet was concluded within a certain time frame.

BizNews sent the copy of the document to SAP for comment. SAP, though, refrained from answering BizNews’s questions and instead said that a full update on its Gupta probe would be ready next month.

The document in question is posted below. On behalf of SAP South Africa, the contract was dated and signed by former MD Brett Parker and the company’s chief financial officer Deena Pillay.

(Editor’s note: We’ve not included the actual signatures of the managers’ in the document, but retained the rest of the document for viewing.)

 

  • Gareth van Zyl is deputy managing editor of BizNews.com.
(Visited 43 times, 2 visits today)