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Open letter to SAP co-founder Hasso Plattner: Time to act on Gupta links

UPDATE: SAP chair Hasso Plattner has responded to our open letter. Read his response by clicking here.


SAP
SAP

JOHANNESBURG — As the Gupta saga around KPMG and McKinsey has exploded onto the global stage, one company that has been embroiled in similar allegations has remained rather quiet. It’s been over 70 days since amaBhungane reported on bombshell revelations regarding SAP Africa’s controversial R100m payment to a Gupta-linked front company called CAD House. The payment was a success fee in lieu of winning a lucrative R1bn Transnet deal. But it was clearly money for jam as CAD did no work subsequent to the deal. The money from SAP flowed into CAD’s bank accounts and then shortly thereafter flew out to various Gupta linked companies such as Sahara Computers. After trying and failing to get more detailed updates on the SAP probe into the Gupta kickback, I’ve decided to write an open letter to Hasso Plattner which we will also forward to the company upon publishing. – Gareth van Zyl

Dear Mr Hasso Plattner,

Seeing as you own the prestigious Fancourt Hotel and Golf Estate along South Africa’s Garden Route, I trust that you are well aware of the recent drama surrounding the controversial Gupta family.

Hasso Plattner.
Hasso Plattner

In fact, the company you co-founded, SAP, has found itself entangled in the Guptas’ web, largely thanks to a very questionable payment your South African unit made to an obscure 3D Printing company called CAD House.

Because you have been Chairman of the Supervisory Board at SAP SE, I trust that you don’t need me to remind you of the details of this payment. But for the purpose of this letter I’ll summarise it as follows:

In July this year, respected investigative journalists amaBhungane broke a story detailing how SAP South Africa paid the Gupta-linked CAD House a R100m ($7.5m) success fee in 2015 to land a deal with state-owned rail provider Transnet, according to revelations from the immigrant family’s leaked emails. (SAP’s Transnet deal was estimated to be at R1bn or $75m.)

Paul O’Sullivan — a top forensic investigator in South Africa who previously helped put away the country’s former top cop Jackie Selebi for corruption — has verified that the Gupta email leaks content is real and that it hasn’t been tampered with. O’Sullivan says the emails will stand up as evidence in a court of law.

CAD House, to this day, still does not have its own website, while its record on producing 3D printing products and services is rather scant.

The payment reeks of corruption and it’s been brought to our attention that Germany’s anti-corruption laws specifically prohibit “facilitation payments”, and impose huge penalties on offenders. (Of course, your company is headquartered in Germany and also listed in New York.)

What’s become further apparent is that SAP has found itself entangled in the front company modus operandi used by the Guptas.

For example, US consulting firm McKinsey & Company stands accused of ensuring Gupta-linked Trillian Capital received a kickback in return for a lucrative contract with state-owned power provider Eskom. In addition, South African telecoms provider Neotel also came under fire in 2015 for paying a Gupta-linked letterbox company called ‘Homix’ a kickback to help it win a Transnet deal.

Meanwhile, I trust that, of late, you’ve read about KPMG South Africa’s woes in London’s Financial Times. Again, the Gupta email leaks have exposed KPMG for its role as the auditors of the Guptas’ Linkway Trading – from which state funds earmarked for the Gupta-linked Estina dairy project in the Free State were diverted to cover the expense of the controversial Gupta family wedding at Sun City in 2013. KPMG has also retracted a controversial report on the so-called South African Revenue Service ‘rogue spy-unit’. That report on its own did immeasurable damage to South Africa in aid of the Guptas, purging the country of competent tax collector staff and becoming a false premise for the country’s previous Finance Minister, Pravin Gordhan, to be threatened with criminal charges by the Hawks and the NPA.

KPMG and McKinsey have faced the wrath of angry South Africans. KPMG South Africa, in particular, was forced to apologise last week while its CEO Trevor Hoole and 7 other executives quit amid the scandal.

While many – including former Finance Minister Pravin Gordhan – have said that the KPMG apology didn’t go far enough, at least there seems to have been some kind of action from the auditing firm.

Considering that SAP finds itself embroiled in a very similar saga in South Africa, the response from your company has been rather muted, minimal and even defensive.

Upon first hearing of the AmaBhungane bombshell report regarding your company’s involvement with CAD House, your South African MD Brett Parker threatened the media.

SAP's suspended South African management team. From left to right: Brett Parker, Lawrence Kandaswami, Deena Pillay and Mehmood Khan.
SAP’s suspended South African management team. From left to right: Brett Parker, Lawrence Kandaswami, Deena Pillay and Mehmood Khan.

Days later, SAP’s head office suspended Parker along with three of your South African managers. SAP has launched a probe into the matter with the help of Baker & McKenzie.

To be fair, your company did fly top executive Adaire-Fox Martin to South Africa to launch the probe into the matter. However, she’s since quietly left the country after arriving with a bang. As South African media, we haven’t heard from her again.

More pressing, the question now becomes why – after more than 70 days – has SAP still not updated the South African public sufficiently on what is going on regarding its Gupta investigation?

Since the story broke in July, I’ve sent your company three media requests along with a series of questions. Each time, most of those questions have not been answered while I’ve received what is a stock-standard, terse response each time. That is that “the internal and external investigations are continuing” and that SAP “will not share any findings before the investigations are concluded”.

Mr Plattner, I feel that we need a greater deal of disclosure and urgency around this matter. I find it difficult to understand why it’s taking so long for SAP to determine whether an irregular payment was made and what the repercussions need to be. Please publicly explain why this is the case.

Considering that this is becoming a global crisis now (KPMG, McKinsey and Bell Pottinger have ‘graced’ headlines on influential publications such as the Financial Times over their links to the Guptas), I think the time for SAP to say something is now.

Read also: Open letter to KPMG global chairman Bill Thomas: Why silent on #GuptaCurse?

You have an opportunity to disclose what exactly happened. In fact, South Africans may even applaud you if you provide a complete and full disclosure of your South African unit’s involvement with the Guptas.

Because the reality is that if you stand by and let your company go silent on this matter, the risk becomes that your own investment in Fancourt and in fact SAP South Africa could be at major risk, especially if the economic fortunes of South Africa take a further turn for the worst.

I trust that you will respond to the above concerns.

*In addition, below are questions that I’ve previously sent to your company regarding SAP’s investigation into the CAD House matter. Our readers and I would appreciate your response to these questions and to my letter above – we will publish any response of yours in full.

Is there an update on what is happening with the probe at SAP Africa?

When can we expect the probe to be released?

What about the four managers at SAP Africa who are under suspension – are they still under suspension and are they still employed by SAP?

Yours sincerely,

Gareth van Zyl

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