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ITWeb Africa

Tuesday, Jan 28th

Allegations have had a profound impact - SAP

Allegations have had a profound impact - SAP

Enterprise software firm SAP has issued a statement confirming that SAP SE has voluntarily disclosed the situation in its South Africa business to US authorities responsible for enforcing the US Foreign Corrupt Practices Act. The company has also initiated disciplinary procedures against three employees and made significant changes to its global sales deal processes.

"As a global company with a commitment to integrity and compliance, the past three months have been humbling for us," said Adaire Fox-Martin, member of the Executive Board of SAP SE, who leads SAP's business in Middle and Eastern Europe (MEE), Europe, the Middle East, and Africa (EMEA), and Greater China. "The allegations of wrongdoing in our South African business have had a profound impact on our employees, customers and partners, and on the South African public - and we apologise wholeheartedly for this."

Fox-Martin said SAP had initiated its voluntary disclosure on 13 July 2017, and that SAP has committed to full and complete cooperation with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC).

She confirmed that the investigation by the DOJ and SEC continues. "We cannot emphasise enough how seriously the SAP Executive Board takes these allegations, or how committed we are to managing this process in a transparent, ethical and responsible way," Fox-Martin said.

In early August Simon Carpenter, Chief Technology Advisor at SAP Africa, said there is a continuity plan in place to ensure that the issue does not impact or disrupt service to the local market.

He said that the most important factor for customers is what the company is doing about the issue. In this regard customers are positive about SAP's response – specifically bringing in the highest levels of worldwide leadership engaged in this process, and the decision to bring on board two external parties to conduct the investigation.

Indications of misconduct

According to its latest statement, the company says to date the investigation has not revealed any evidence of a payment to a South African government official, including Transnet and Eskom employees.

"It has, however, uncovered indications of misconduct in issues relating to the management of Gupta-related third parties. To this end, SAP has instituted formal disciplinary proceedings, in accordance with South African labour law, against three employees who were placed on administrative leave at the beginning of the investigation. SAP has been clear from the outset that it will not tolerate misconduct or wrongdoing," reads the statement.

The investigation has found that the fourth employee placed on administrative leave had no material involvement with Gupta-related parties. The employee will return to work.

The company added that its Executive Board has decided to eliminate sales commissions on all public sector deals in countries with a Corruption Perceptions Index (according to Transparency International) below 50, effective immediately. South Africa's rating is 45.

The SAP Executive Board has initiated - on a global basis - extensive additional controls and due diligence into relationships with sales agents and value-added resellers, including additional audit functions.

SAP will allocate additional legal compliance staff to the SAP Africa market unit.

"They will be based in South Africa and report into SAP's Global Compliance organisation. SAP will further strengthen its Compliance Committee in the SAP Africa region, consisting of local management, compliance and other corporate functions, to ensure individual deal sanity and integrity, and promote compliance generally," the company added.

The company intends to release findings of the ongoing investigations once completed.