The Organisation Undoing Tax Abuse (Outa) said SAP’s R2.3-billion in penalties to South Africa show that alternative dispute resolutions can help resolve state capture cases but has warned that people need to be jailed over the German firm’s corrupt dealings.

“SAP’s conduct and direct involvement in corruption in South Africa was despicable and outrageous,” said Outa CEO Wayne Duvenage in a statement on Friday.

The agreement was made in terms of an alternative dispute resolution by South Africa’s National Prosecuting Authority (NPA) and the US department of justice.

The corruption that occurred between 2013 and 2017, with some contracts negotiated through members of the notorious Gupta family, resulted in SAP contracts with the City of Johannesburg, the City of Tshwane, the department of water & sanitation, Eskom, Transnet, the South African Revenue Service, the Passenger Rail Agency of South Africa and the Gauteng department of finance.

The US department of justice said the German software company will altogether pay more than US$220-million (R4.1-billion) in penalties for corruption in South Africa and Indonesia, with “up to $55.1-million of the criminal penalty” going towards the South African settlement.

The NPA said SAP will end up paying R2.2-billion to the South African entities in repayments, with some already paid, plus R750-million in penalties. This makes for a total of R2.95-billion to be settled to South African authorities. The penalty payment goes into the government’s criminal assets recovery account.

Criminal investigations

The agreement also requires the software firm to cooperate with US and South African authorities in criminal investigations into the individuals involved in the corruption, including former SAP executives, South African government officials and the intermediaries.

“While the alternative dispute resolution process does help to bring these matters to a close and achieve some level of accountability, Outa would like to see the individuals involved being held to account, including those who acted for SAP, the officials in the government bodies, and their intermediaries,” said Duvenage.

“It’s all too easy for these wealthy companies to pay fines and change their processes to ensure this conduct is never repeated, but this doesn’t resolve the fact that the people who were directly involved are still walking the streets and enjoying the fruits of their ill-gotten gains. It is imperative that those involved are now rounded up, charged and imprisoned for their role in these nefarious activities.”

Read: SAP to cough up billions to settle corruption probe

Outa said it supports alternative dispute resolutions as a speedier – and often more effective – means of achieving justice, particularly when they include a requirement that the company is obliged to cooperate with criminal prosecution of the individuals involved.

It would like to see the R750-million which goes in the criminal asset recovery account being used to support the NPA in its efforts to prosecute state capture cases.

Ouma Rabaji-Rasethaba, deputy national director of public prosecutions, said the resolution is a “bold new step” that takes South Africa forward in fighting crime.

“The present resolution obliges SAP to return all benefits that it received under the corrupt contracts. It also subjects SAP to punitive reparation payments that far exceed any fine that the South African courts have ever imposed on a company as a criminal sentence.”

SAP has already reported the names of individuals, businesses, details of payment transactions, texts and e-mails to the NPA; and it will be obliged to commit to a corporate compliance programme to prevent future corrupt practices.

Meanwhile, News24 reported on Friday that SAP paid for government workers to travel to New York to play golf in 2015, citing documents related to the case.

“Chat messages between the SAP South Africa local account executive and a City of Johannesburg employee corroborate that the local account executive directed, and the business partner made, the improper payment,” US legal filings stated, News24 reported.  – © 2024 NewsCentral Media

AI-generated summary of this article

• Outa has called for the arrest and prosecution of individuals involved in the SAP corruption scandal in South Africa.
• Background: In 2017, it was discovered that SAP had paid millions of dollars in bribes to secure contracts with state-owned entities.
• Outa’s demands: The organisation has urged the National Prosecuting Authority to take action against those involved in the scandal, including former executives and politicians.
• SAP’s response: SAP has since apologised for its role in the scandal and has implemented measures to prevent similar incidents from occurring in the future.

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