Second major German software group exposed for alleged Gupta kickbacks

German software company, Software AG, has been implicated in the latest Gupta leaks for allegedly offering kickbacks to Gupta-controlled companies for their help in securing government contracts.

According to the latest reports from investigative journalists at amaBhungane and Scorpio, emails and documents show that Software AG entered into several agreements with Gupta-controlled group, Global Softech Solutions (GSS), where it offered large ‘commissions’ for government contracts.

This follows a similar pattern to software company SAP, which was recently found to have paid as much as R100 million ‘commission’ to a Gupta-owned company, for its assistance in securing contracts with Transnet. SAP has since denied any wrongdoing, but has also suspended its South African management team.

In both cases, amaBhungane’s investigations showed that there was little substance in the Guptas’ involvement, beyond political influence.

With Software AG, the Gupta links run deeper, where GSS – which would become 50% owned by the Guptas’ Sahara Computers – became its ‘chosen partner’ on a number of contract opportunities with government.

The leaks revealed at least four Software AG contracts, with potential revenue for GSS of R56.9 million, R54 million and the largest amount, R180 million for a Transnet project. A deal with Manguang municipality was also listed.

Also exposed was an apparent plan for secondary kickbacks to a company called Sensational Signs, as a ‘finder’s fee’. Sensational Signs’ sole director is Mohamed Mobeen Jeena, who has links to Software AG’s sales director, Riaaz Jeena.

This arrangement was set up in what appears to be an attempt to ensure that Jeena would benefit personally from securing contracts for Software AG, beyond his mandate.

On the R180 million Transnet deal, Sensational Signs was set to score R27 million from the alleged kickback GSS would receive.

The emails also revealed that GSS would score R10.5 million from a contract with Sasol, of which R4.2 million would go to Sensational Signs. A contract with MutliChoice would deliver R3.8 million to GSS, most of which (R3.2 million) would ultimately go to Sensational Signs.

Responding to amaBhungane and Scorpio’s queries on the matter, Software AG denied any knowledge of these deals, saying that it has not generated revenue from any of the contracts mentioned, except for one private sector contract.

It said that the ‘proposals’ had expired, and it has not entered into any agreements with GSS since December 2015.

Speaking on its partnership programme, of which GSS was one, the group said: “Software AG prospective Partners undergo a stringent verification process that ensures Partners are able to add value to the customer… Software AG is committed to conducting its business fairly, impartially, in an ethical and proper manner, and in compliance with all laws and regulations.”

MultiChoice and Sasol said that its contracts were with Software AG alone, and that GSS and Sensational Signs were not mentioned anywhere. They denied any knowledge of the commission structure.

According to amaBhungane and Scorpio, all attempts to get in contact with GSS – including showing up at its offices (which were empty) – proved fruitless.

You can read the full detailed investigation on amaBhungane and the Daily Maverick.

Read: SAP suspends SA management as it launches investigation into Gupta links

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Second major German software group exposed for alleged Gupta kickbacks