German software giant fined R4.1 billion in bribery and corruption case involving South Africa

 ·11 Jan 2024

Global software company SAP will pay over $220 million (R4.1 billion) to resolve investigations by the U.S. Justice Department and the Securities and Exchange Commission (SEC) into bribes paid to South African and Indonesian officials to obtain valuable government business.

According to court documents, SAP and its co-conspirators made bribe payments and provided other things of value intended for the benefit of South African and Indonesian foreign officials, delivering money in the form of cash payments, political contributions, and wire and other electronic transfers, along with luxury goods purchased during shopping trips.

In relation to South Africa, SAP participated in a plan to bribe South African officials and manipulate SAP’s financial records – all with the intention of gaining unfair advantages for SAP while dealing with various contracts with South African departments.

These included:

  • The City of Johannesburg,
  • The City of Tshwane,
  • The Department of Water and Sanitation (South Africa’s state-owned and state-controlled custodian of water services), and
  • Eskom ( South Africa’s state-owned and state-controlled energy company).

The bribery allegedly took place between 2013 and 2017.

SAP entered into a three-year deferred prosecution agreement with the department concerning criminal information filed in the Eastern District of Virginia.

The company was charged with two counts:

  1. Conspiracy to violate the anti-bribery and books and records provisions of the FCPA relating to its scheme to pay bribes to South African officials
  2. Conspiracy to violate the anti-bribery provision of the FCPA for its scheme to pay bribes to Indonesian officials

“SAP has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce,” said U.S. Attorney Jessica Aber.

Under the terms of the deal, SAP will pay a criminal penalty of $118.8 million (R2.2 billion) and administrative forfeiture of $103,396,765 (R1.9 billion).

Additionally, The U.S. Justice Department will credit up to $55.1 million (R1 billion) of the criminal penalty against amounts that SAP pays to resolve an investigation by law enforcement authorities in South Africa for related conduct.

The department will credit up to the full $103-million forfeiture amount against the disgorgement that SAP pays to the SEC or South African authorities.

“This successful resolution against SAP is another example of the power of relationships and persistence,” said Assistant Director in Charge Donald Always of the FBI’s Los Angeles Field Office.

“The sustained diligence by the prosecution team and continuous collaboration with South African law enforcement, regulators, and prosecutors identified corrupt activity in multiple countries.

“The FBI will continue our nonstop efforts to identify, investigate, and prosecute companies willfully engaging in corrupt activities around the world,” he added.

SAP in South Africa did not immediately respond to a request for comment.

Read: Rand manipulation: Competition Commission responds to case collapse

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