Tech giant SAP is probing its South Africa office for kickbacks paid to president Zuma’s cronies

Case of rotten apples? (Reuters/Leonhard Foeger).
Case of rotten apples? (Reuters/Leonhard Foeger).
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German software giant SAP has been sucked into the corruption vortex that has engulfed South Africa’s president Jacob Zuma and his infamous benefactors, the Gupta family.

The tech firm launched a probe into allegations SAP South Africa paid kickbacks in 2015 to a Gupta-linked company to secure contracts with state-owned businesses SAP has since suspended four executives from the South Africa branch over the 100 million rand ($7.6 million) deal.

SAP agreed to pay a “10% sales commission” with CAD House, a Gupta-subsidiary which sells 3D printers, according to amaBhungane, the group of investigative journalists behind the original #GuptaLeaks report. The commission was to land a contract with state railway enterprise, Transnet. Documents leaked to amaBhungane show CAD House is partly owned by Santosh Choubey, a friend of the Guptas.

The firm has no documented experience with consultancy or sales. But SAP South Africa’s chief of financial officer, Deena Pillay, said they chose CAD House because “they’re small guys who would go out there, identify business and come to SAP with that opportunity.”  The contract between Transnet and SAP was eventually signed before December 31, 2015. 

Between April and December 2016, a total of 99.9 million rand (about $.7.6 million) was paid from SAP to CAD House. It was then laundered to several Gupta subsidiaries. SAP went on to sign a contract with state electricity provider, Eskom in 2016, with the help of former SAP managing director, Lawrence Kandaswami, and part-owner of CAD House, Santosh Choubey.

On July 17, international law firm, Baker McKenzie, was appointed by SAP to conduct independent investigations and he company appointed longtime executive, Claas Kuehnemann, to serve as interim managing director.  The company is declining to comment further till after the investigation.