SAP Settles Multi-Country Bribery Allegations with $222 Million Payment

SAP, the renowned German multinational software corporation, has reached a significant settlement with the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), agreeing to a $222 million payment. This resolution comes as the company faced allegations of engaging in bribery to secure lucrative deals in several countries, including South Africa.

The DOJ announced that SAP had entered a three-year deferred prosecution agreement, under which it will pay a criminal fine of $118.8 million and forfeit an additional $103.4 million – an attempt to conclude investigations into the company’s practices that had undermined fair business competition.

American authorities asserted that SAP was involved in schemes across seven countries, deliberately manipulating financial records to disguise corrupt payments as legitimate business expenditures. These allegations have not only involved SAP's business dealings in South Africa but extended to Indonesia, Azerbaijan, Ghana, Kenya, Malawi, and Tanzania as well.

In one case highlighted by the SEC, it was reported that in 2015, SAP South Africa financed luxury trips to New York City – including dining experiences and golf outings – for government officials to influence the procurement of a $13.2 million contract from the City of Johannesburg. Separately, leaked communications from an SAP Indonesia account executive implied the necessity of substantial incentives to secure government business.

SAP's response to the international scrutiny has been one of cooperation and remediation. The company stated that it had parted ways with all individuals implicated in the matter over five years ago and expressed a readiness to uplift its corporate governance to prevent a similar occurrence in the future.

Upon the conclusion of the investigation, which began promptly after South African media uncovered alleged wrongdoings in 2017, SAP has committed to enhancing internal controls and revamping its commission policies. These measures serve as a testament to SAP's declared dedication to ethical business practices.

The US justice department has recognized these efforts by SAP and stated that the company would not face prosecution after the three-year term of its agreement, provided that it adheres to the prescribed compliance and oversight conditions.

In closing, SAP has welcomed the settlement reached with the National Prosecuting Authority of South Africa. This brings to an end a long litigation phase and sets the stage for SAP to fortify its operations against corruption risks.