SAP Approaches US Authorities Over Gupta Family Scandal

World’s second largest software firm SAP has reached out to the US legal authorities as well as the SEC over its alleged involvement in a scandal linked to South Africa’s highly controversial Gupta family.

It has been alleged that the German software maker has paid $6.8 million in kickbacks to companies linked with Gupta family to secure business contracts from couple of state-run firms in South Africa.

SAP said on Thursday it has reported itself to the US Department of Justice and Security Exchange Commision under the Foreign Corrupt Practices Act.

“SAP had initiated its voluntary disclosure on July 13, 2017, and that SAP has committed to full and complete cooperation with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC),” the company said in a statement.

The firm also has sacked three employees who are believed to have some involvement in the corruption charges. Though nothing has been proved yet, an exhaustive investigation is underway.

What Is The SAP Gupta Family Scandal

In July this year the software major was accused of having paid 94 million Rand or $6.8 million to CAD House – a Gupta family owned company – to secure contracts from two government owned firms – Transnet and Eskom.

SAP admits to have paid this amount but says the payments were part of the ‘commissions’ it pay to third parties.

“SAP provided software and received revenue totaling approximately ZAR 660 million (approximately USD 48 million), and paid commissions to entities currently understood to be Gupta-related totaling approximately ZAR 94 million (approximately USD 6.8 million),” SAP noted in the statement.

The deal goes back to between December 2014 and November 2016 when SAP bagged two deals to supply software solutions to Transnet – a state owned rail and port operator, and two contracts for sale of software to Eskom – the state owned power company.

Again, between December 2016 and June 2017, SAP bagged two more contracts to provide software and services solutions to Eskom.

However, all these contracts were bagged through the help of the Gupta Family conntrolled firm.

SAP admits to have bagged these contracts through this company but pledges innocence of not knowing that the company is related to the controversial Gupta Family.

Who’s This Gupta Family

The controversial Gupta Family has its origin in India – from Saharanpur in UP, but the family has now settled in South Africa and one of the richest business houses in the country. The family , brothers Atul, Rajesh and Ajay – has close relations with President Jacob Zuma and has business interests in mining, software, textile, software and investments. The local media as well as the opposition political party in the country says the Gupta Family runs a shadow government in the country.

The family has been accused of having involvement in numerous scandals and corruptions in the past. Both president Zuma and the family, however, have always refuted all such allegations.

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