It’s a hefty punishment for SAP: About eight years ago, the company renewed software licenses from the South African Ministry of Water for a fee, even though they hadn’t yet expired. So payments without anything in return. The indictment stated at the time that SAP was partly responsible for the catastrophic water supply in the country. In 2018, the company also admitted to having paid nine million dollars to a company that was associated with corrupt ex-president Jacob Zuma. Because of these and other corruption allegations, SAP must now pay a fine of $222 million.
The software company from Kraichgau is said to have bribed in a total of seven countries. The US Justice Department said on Wednesday that SAP had agreed to a deal to resolve allegations of bribery of government officials in South Africa and Indonesia – with a three-year reprieve, it said. According to a spokesman, SAP understands this to mean a three-year probation. The software company has also agreed to a civil settlement with the US Securities and Exchange Commission (SEC) to resolve similar corruption allegations in Azerbaijan, Ghana, Kenya, Malawi and Tanzania. The regulator said SAP falsified order books and records in these countries between 2013 and 2022 and made bribes appear to be legitimate business expenses. According to prosecutors, SAP failed to adequately control its accounting.
“We will turn over every stone”
“SAP paid bribes to officials at state-owned companies in South Africa and Indonesia to win valuable government contracts,” said Deputy Attorney General Nicole M. Argentieri, but the company has now accepted responsibility for its behavior. Her office and the SEC had worked with criminal and civil authorities in South Africa on the settlement. The SEC, the counterpart to the German financial regulator Bafin, can prosecute corruption activities around the world if business relationships exist in the USA. SAP is listed on the New York Stock Exchange.
The SAP spokesman says they were prepared for the fine and had set aside reserves, saying they were manageable. Other companies would have had to pay much higher penalties. In 2008, Siemens paid around $800 million to the US authorities in its corruption scandal.
In a statement, SAP said it was pleased that the matter had been resolved. As early as 2017, SAP co-founder Hasso Plattner apologized to the “people of South Africa” and promised: “We will turn over every stone to find out what happened and what didn’t.” More than five years ago, the company wrote on Wednesday, it separated from all responsible parties and improved the internal compliance program. Even that, however, is not a watertight remedy against corrupt employees and consultants.