The Organisation Undoing Tax Abuse (OUTA) has welcomed the outcome of stiff penalties and the resolution reached between the National Prosecution Authority (NPA) and SAP South Africa which mandates the software company to pay a fine of R2.95 billion to the South African government.
This, after SAP global this week concluded a dispute resolution process with the South African and US law enforcement authorities, following years of investigations into corruption committed in seven countries including South Africa.
Yesterday ITWeb reported that SAP has agreed to pay a criminal fine of over $220 million (R4.1 billion) to both the US Justice Department, and the US Securities and Exchange Commission (SEC).
Over and above these restitution payments, SAP has also agreed to pay an additional monetary reparation fine to South Africa of R2.95 billion, according to a statement issued by the NPA yesterday afternoon.
The penalty payment will go into South Africa’s Criminal Assets Recovery Account and some of the funds will be paid back to a number of government departments, which SAP had signed dodgy deals with, it says.
The corruption, which took place between 2013 and 2017, with some negotiated through several Gupta family companies, resulted in SAP being granted contracts with the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation, Eskom, Transnet, the South African Revenue Service, Passenger Rail Agency of South Africa and the Gauteng Department of Finance, notes the NPA.
Responding to the fines, OUTA CEO Wayne Duvenage stresses in a statement, it is imperative that those individuals directly involved are now rounded up, charged and imprisoned for their role in these “nefarious activities”.
“SAP’s conduct and direct involvement in corruption in SA was despicable and outrageous. 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 the intermediaries,” adds Duvenage. Duvenage is of the view that it’s all too easy for 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”.
In a statement published on its Website yesterday, SAP says it initiated disciplinary action and separated from all responsible parties more than five years ago, and has since significantly enhanced its global compliance programme and related internal controls.
SAP’s conduct and direct involvement in corruption in South Africa was despicable and outrageous.
Wayne Duvenage, OUTA CEO
According to the NPA, the R2.95 billion fine is made up of a number of amounts which SAP has voluntarily agreed to repay to several SOEs and government departments including Eskom, Transnet, and the Cities of Johannesburg and Tshwane, the Gauteng Department of Finance, SARS and PRASA.
“It also includes R750 million payable into the Criminal Assets Recovery Account as punitive reparation payments in recognition of the social and economic harm caused by SAP’s conduct in South Africa.”
The NPA adds the agreement reached with SAP requires the software firm to cooperate with the US and SA authorities in criminal investigations into the individuals involved in the corruption, including former SAP executives, the South African government body officials, and the intermediaries.
“This agreement 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,” says NPA.
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