Why the US and not SA, critics ask SAP on state capture probe

Johannesburg - German software giant SAP’s reluctance to approach South African authorities has come under fire, as the Hawks confirmed they are investigating SAP as part of their state capture probe.

SAP announced on Thursday that it has reported its Gupta-linked accounts to US authorities for further investigation, and that it is initiating a disciplinary process against three employees.

Hawks spokesperson Hangwani Mulaudzi told Fin24 the priority crimes unit is finalising plans to travel overseas to probe documents related to state capture, adding that four investigators are working around the clock on the state capture probe. 

He said the investigation into SAP has been on the Hawks' radar for some time, but that the investigators wanted to ensure they covered all their bases.

"We are in the process of interviewing role players and finalising the legal aspects," he said. "And we are collaborating with our US counterparts."

He said it is important to have all the outstanding information when the investigators arrive in the US and Germany.

According to Mulaudzi, the Hawks have not received any requests from foreign authorities. "So we are doing it ourselves, so that we deal with this case. That should also be an indicator of our seriousness. We are not waiting for anyone to come and collaborate with us. We are the ones taking the lead."

He said the Hawks will approach the US and German authorities overseas, and SAP will be part of the probe, but the Hawks haven’t interviewed any SAP employees as yet.

Adaire Fox-Martin, a member of the SAP executive board who leads the company’s business in EMEA, MEE and Greater China, confirmed that SAP has not had dealings with the South African authorities regarding the wrongdoing the probe has found. 

SAP head of investigations and global compliance Philipp Klarmann said there are different obligations in different jurisdictions.

"SAP is very active globally," he said. “We had to report this to US authorities."

SAP has not said it will not disclose to the South African authorities, it has just not made a decision on its approach, Klarmann said. 

Democratic Alliance public enterprises spokesperson Natasha Mazzone insisted that SAP also disclose evidence to SA authorities.

SAP said it would report its Gupta-linked accounts to prosecutors at the US Department of Justice and the Securities and Exchange Commission, after an internal investigation uncovered “indications of misconduct in issues relating to the management of Gupta-related third parties”.

In September this year, the DA laid charges of money laundering and corruption against the South African subsidiary of the software firm, after investigative journalism outfit amaBhungane reported that R100m in kickbacks allegedly changed hands between SAP and a Gupta-linked company, CAD House, to secure contracts for the firm at Transnet and Eskom.

SAP's own probe was sparked  by the amaBhungane investigation report that found SAP paid a 10% “sales commission” to a company controlled by the Guptas to clinch business from Transnet. Evidence found by the investigative unit showed that Gupta-linked CAD House was deliberately interposed to obscure Gupta involvement and to launder the proceeds to them. 

SAP appointed Baker McKenzie, whose preliminary findings confirmed that there was indeed misconduct relating to the sales commission.

The preliminary findings of SAP’s internal investigation have not yet revealed any evidence that payments were made to the South African government, Eskom or Transnet officials. However, four executives have been placed on administrative leave with three under disciplinary action.

Reacting to SAP’s statement, Transnet said the probe had preliminarily absolved Transnet of wrongdoing.

“The investigation has not revealed any evidence of payment to any Transnet employees,” said Transnet spokesperson Molatwane Likhethe. “The payments were as a result of a commission agreement between SAP and its suppliers.”

Transnet felt a sense of relief and encouragement on behalf of its over 60 000 employees who continue to work hard to make sure that the goods chain keeps on moving, Likhethe said.

Mazzone said SAP has voluntarily disclosed information to US authorities and it must now do the same thing in South Africa, and volunteer this information to the South African Police Service.

“Following SAP’s admission today, the police have an obligation to investigate fully and to leave no stone unturned,” she said. “SAP must hand over any and all information that may have bearing on the investigation."

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