Court documents reveal how SAP bribed Eskom officials

Court documents have revealed details surrounding German software giant SAP’s bribery case, making public how the multinational company bought the favour of officials at parastatals such as Transnet and Eskom.

According to allegations brought by the U.S. government, the software giant engaged with multiple third-party intermediaries to help it obtain and retain business with Eskom and other parastatals despite the intermediaries providing no legitimate services.

This included falsely booking payments to such intermediaries for sales-related services.

However, the intermediaries provided no services or products and lacked experience and expertise in SAP’s business.

Despite this, the software giant paid the intermediaries, which were owned by individuals closely affiliated with South African government officials.

It also falsely recorded the payments as commissions or similar expenses.

Sunday Times reported on a text message exchange between an SAP employee and a City of Johannesburg official that showed the pair discussing a R2.2 million bribe and how to keep it quiet.

The new details give forensic insight into how SAP bribed officials at the municipality and parastatals such as Transnet and Eskom to secure business.

On Wednesday, SAP agreed to pay $220 million (R4.1 billion) to resolve investigations by the U.S. Justice Department and the Securities and Exchange Commission (SEC) surrounding bribery by staff in South Africa and Indonesia.

The German software giant stood accused of violating the U.S. Foreign Corrupt Practices Act.

In a statement published on Wednesday, 10 January 2024, the U.S. Department of Justice said the deal was coordinated with input from prosecutorial authorities in South Africa and the SEC.

“SAP paid bribes to officials at state-owned enterprises in South Africa and Indonesia to obtain valuable government business,” said Nicole Argentieri, acting assistant attorney general of the department’s criminal division.

Allegations of SAP’s bribery in South Africa cover the period between 2013 and 2017, and the company confirmed that an internal investigation into its South African business revealed dodgy dealings with businesses related to the Gupta family.

“SAP has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce,” said U.S. Attorney Jessica Aber for the Eastern District of Virginia.

The U.S. Justice Department and SEC negotiated that the software giant must pay a criminal penalty of $118.8 million (R2.2 billion) and administrative forfeiture of $103,396,765 (R1.9 billion).

The administrative penalty has been earmarked to settle claims by the SEC and the South African government against SAP.

SAP must also continue cooperating with the U.S. Department of Justice in any ongoing or future criminal investigations regarding the period under investigation.