South Africa: SAP in alleged R100m Gupta ‘kickback’ scandal

Software AG, Gupta, Scandal, Kickbacks, South Africa, Corruption, Report, GuptaLeaks
Ajay and Atul Gupta (Image Source: Mail & Guardian)
Ajay and Atul Gupta (Image Source: Mail & Guardian)
Ajay and Atul Gupta (Image Source: Mail & Guardian)

The South African office of German Software Giant SAP,  have found themselves in the middle of the ongoing corruption scandal involving the Gupta family.

Early on Tuesday morning reports started circulating about the software companies alleged agreement with a Gupta front company which would see SAP pay a 10% “sales commission” to the Gupta controlled company. These alleged kickbacks would help SAP secure a contract worth at least R100m from state-owned Transnet.

A report by investigative journalism units amaBhungane and Scorpio, revealed that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company, CAD House, that specialises in selling 3D printers.

The investigation revealed that, “The terms suggest a thinly disguised kickback arrangement: if the Gupta company were the ‘effective cause’ of SAP landing a Transnet contract worth R100m or more, it would get 10%.”

According to the investigative report, after the agreement was finalised, SAP paid CAD House R99.9m, it added that this “suggests SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies”.

The money was reportedly taken straight out of CAD House and moved to other Gupta companies, including Sahara Computers and Sahara Systems, according to the investigation.

SAP has denied any suggestions that they paid kickbacks or that the company was party to any form of money laundering. SAP argued that CAD House had “the necessary skills in terms of positioning our solution” and was paid a sales commission for acting as “an extension of the sales force”.

Neither CAD House nor the Gupta family responded to detailed questions according to amaBhungane and Scorpio.


Staff Writer