SAP Must Explain Why It Denied And Did Not Investigate Bribery Allegations In South Africa Back In February 2017

On 21 February 2017 iAfrikan reported that SAP South Africa's Managing Director, Lawrence Kandaswami, had been implicated in an alleged $38 Million bribery and kickback scandal involving South Africa's Department of Water and Sanitations. However, in communications with iAfrikan earlier in 2017 after the article was published, SAP unequivocally denied the allegations.

"...this article, which is completely untrue, unjustified caused incredible stress within our team," said Kevin Welman, Director at ByDesign Communications in an e-mail to iAfrikan.

ByDesign Communications is the South African communications company that is contracted to handle SAP South Africa's communications and public relations.

Kevin Welman ByDesign Communications
Kevin Welman, Director at ByDesign Communications; which handles SAP South Africa's Public Relations and Communications.

In the same e-mail to iAfrikan, Welman further indicated that SAP's global CEO is aware of the article mentioning the bribery allegations, "...to the point where the article moved all the way up the management chain until it arrived in the [SAP's] global CEO’s office,".

Welman also explained that all he wants to know is why SAP was not afforded the right to comment, a right which he not only declined in another e-mail communication in April 2017 when he said that, "We would prefer not to publish anything now, the issue [bribery and kickback allegations] is dead and doesn't need to be re-opened,", but SAP along with ByDesign Communications have not responded to iAfrikan's e-mailed questions sent on 13 July 2017, despite having read the e-mail asking further questions about the new details revealed in the #GuptaLeaks e-mail revelations which further add weight to what we reported on in February 2017.

Also, Ansophie Strydom, who is the Head of Integrated Communications at SAP Africa, was copied on all the communications and emphatically concurred and echoed Welman's statements by stating that "I absolutely agree with Kevin,".

Fast forward a few months from those communications with iAfrikan and that initial article earlier in 2017 and on 11 July 2017 amaBhungane, in partnership with the Daily Mavericks Scorpio unit, published revelations that SAP had agreed in 2015, based on e-mails that form part of the #GuptaLeaks, that if CAD House (a company that specialises in 3D modelling with no SAP skills or experience) was the “effective cause” of SAP landing a Transnet contract worth R100 million (approximately $7 million) or more, it (CAD House) would get 10%.

The following day after the amaBhungane revelations, SAP issued a statement which said that they have "initiated an independent investigation spearheaded by a multinational law firm and overseen by Executive Board Member Adaire Fox-Martin to vigorously review contracts awarded by SAP South Africa,".

Subsequently and more telling, Fox-Martin flew down to South Africa and more importantly SAP placed a number of key staff members in South Africa on suspension pending the investigation report into contracts awarded by SAP South Africa.

As part of their statement SAP said that they rigorously investigate any allegations of wrongdoing in any of the more than 180 countries where they operate, now this begs the question;

Why didn't SAP investigate the bribery and kickback allegations back in February 2017 especially when they confirmed that the global CEO is aware?

Although mostly conjencture at the moment, the reason SAP started acting swiftly in July 2017 regarding the bribery and kickback allegations in South Africa seems to have a lot to do with the possible legal investigation that could come not from South Africa (where the alleged crimes took place), nor from Germany (where SAP has its headquarters), but rather from possibly the United States of America.

Given that the authenticity of the #Guptaleaks e-mails is yet to be disputed, specifically the ones involving SAP, this could trigger authorities in the USA to start investigating SAP.

Why?

SAP is listed on the New York Stock Exchange (NYSE). This in turn means that SAP is subjected to corporate and other laws in the USA, one of the key ones being the "Foreign Corrupt Practices Act" (FCPA).

In South Africa, SAP's involvement in these bribery and kickback allegations is important because it involves public funds.

Irrespective of the findings of the internal SAP investigation, which seems to be more concerned with "optics" for the sake of investors and preserving the NYSE listing rather than the alleged crimes, it can also be expected that SAP along with all involved in this scandal can expect not only to face an investigation but possibly criminal charges in South Africa too.

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