• SAP, a German software provider and one of the world’s largest companies, has been ordered to pay South Africa R500 million for its dodgy agreements with Eskom and Gupta-linked company.
• The SIU says that contracts between SAP and Eskom fruitlessly wasted taxpayer money in the billions.
• SAP is also faces fines in the US over being involved in similar alleged corruption in Indonesia.

Operating worldwide, the German software providing Systems Applications and Products (SAP) has been ordered to pay South Africa’s anti-corruption task force, the SIU, R500 million due to dodgy contracts it received from Eskom between 2013 and 2016.

SAP has been ordered on Tuesday by the Special Tribunal to pay the amount within the next seven days.

Eskom and SAP drew up two contracts, one for an “Enabling Agreement” and one for a “Cloud Services Agreement” during those years. They are believed to be of approximately R1.1 billion in value. The Special Tribunal declared both contracts “constitutionally invalid” last week.

“The order of the Special Tribunal is part of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions due to negligence or corruption,” reads an announcement from SIU spokesperson Kaizer Kganyango.

“The settlement agreement does not absolve SAP or any implicated party from possible prosecution,” the announcement adds.

According to the SIU, an incredibly busy agency, which launched an investigation into the dealings of Eskom and its contract processes, both contracts did not comply with the Public Finance Management Act which “resulted in Eskom incurring fruitless and wasteful expenditures in respect of the agreements” for which now SAP must ante up.

The investigation launched by the SIU found that Eskom had entered into the Enabling Agreement contract with SAP, a software provider, for “licences, maintenance, support and ad hoc services” for around R1 billion.

After this contract was established, SAP entered into an agreement with CAD House CC, a Gupta-linked company, the SIU says. After Eskom paid SAP with taxpayer money, SAP then sent a portion of the funds to CAD House.

Also involved with these dealings was another R21 million contract so that SAP could provide Cloud Computing services to Eskom.

In January, the Special Tribunal ordered SAP to pay R2.2 billion after it reached a resolution with the National Prosecuting Authority (NPA). The German firm is also facing corruption allegations in the United States, with the Department of Justice (DOJ) ordering SAP to pay over R4 billion due to resolve investigations the department conducted into violations of the US’s Foreign Corrupt Practices Act

“SAP’s resolution with the department stems from schemes to pay bribes to government officials in South Africa and Indonesia,” the DOJ writes. SAP is one of the world’s largest corporations and has a market capitalisation of over 223 billion Euros.

[Image – Photo by Kenny Eliason on Unsplash]