SAP accused of improper conduct over East Africa contracts
1 March 2019
SAP SE has been accused of “improper conduct” related to dealings by a services partner to win state contracts in Kenya and Tanzania, a claim that could plunge the German software giant into a second African corruption scandal in as many years.
The graft allegations, which are being investigated by U.S. authorities, relate to deals in 2014 and 2015, the Walldorf-based company said in an emailed statement on Thursday. SAP and Twenty Third Century Systems, a partner across Africa and the Middle East, have since made management changes and strengthened compliance, SAP said.
The news comes a year after SAP said it paid 128.6 million rand ($9.2 million) to companies linked to South Africa’s Gupta family, who are accused of numerous cases of state-related corruption. The U.S. Department of Justice and the U.S. Securities and Exchange Commission are investigating the company in relation to those deals as well.
“Our policy is, and always will be, to carry out all company activities in accordance with the letter and spirit of applicable laws,” SAP said.
The fresh allegations were first reported by South African website TechCentral, which said TTCS allegedly bribed officials at the Tanzania Ports Authority with $800,000 to win a $6.6 million contract. The claims were made by a whistleblower and lodged in the U.S., according to the website.
SAP’s partner, TTCS, is 49 percent owned by EOH Holdings Ltd., a Johannesburg-based IT firm that’s already embroiled in allegations of corruption regarding South African government contracts. The latest claims relate to a time before its investment in TTCS, and EOH was unaware of them when agreeing to the deal, an EOH spokeswoman said.
“It was before our time and we have provided SAP with any information we have on the matter,” she said.
SAP shares closed 0.4 percent higher at 94.20 euros at the close in Frankfurt, valuing the company at 115 billion euros.