SAP rejects allegations of R100-million Gupta kickbacks

SAP has rejected allegations that it paid a Gupta-owned company R100 million in kickbacks for helping it score R1 billion in government contracts.

According to amaBhungane, correspondence between SAP and a Gupta company called CAD House shows that SAP used the company as a “sales partner” to secure contracts with Transnet.

The report states that SAP said if CAD House was the “effective cause” of SAP landing a Transnet contract worth R100 million or more, it would get 10%.

Industry players said a 10% commission for a sales agreement is unusually high.

In the year that followed, SAP paid CAD House R99.9 million, meaning that R1 billion worth of contracts were secured by the Gupta company.

According to amaBhungane, SAP has denied it paid “kickbacks” to CAD House, stating that the company was well-positioned to act as an extension of its sales force.

This is despite the fact that CAD House was a company which specialised in selling 3D printers – not a marketing organisation.

CAD House, which is not well known, is linked to the Gupta empire through Sahara Computers. Leaked emails show that the company was run as a subsidiary of Sahara.

Comission

While commission agreements are not uncommon for businesses like SAP, the outlier in this case is that Transnet was already a SAP customer. This appears to show that the group was looking for a “clincher”, not a marketing team.

According to leaked emails, as quoted by amaBhungane, CAD House’s main purpose was to “assist [SAP] in obtaining Customer consent to the Customer Contract and Customer’s requisite signatures to such agreement”.

The agreement with CAD House was reportedly signed by SAP South Africa’s chief financial officer, who was questioned on the deal, but could not explain why CAD House was used as a “sales force”.

It is further alleged that the kickback paid to CAD House was laundered and fed to the Gupta empire.

Unfounded claims – SAP

SAP has denied the allegations regarding CAD House, calling them “unfounded and unsubstantiated”.

“SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest global compliance and legal standards,” it said.

As part of its business, SAP South Africa engages various subcontractors, SMMEs, and partners.

It said it has always been SAP’s policy to partner with a wide pool of organisations that qualify for its partner programme, if they meet the criteria of “our comprehensive global due diligence and certification processes”.

“SAP has taken strong exception to the reports issued in the media today, and is investigating various possible actions,” said SAP Africa MD Brett Parker.

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SAP rejects allegations of R100-million Gupta kickbacks