SAP Reported Itself to U.S. Authorities Over Gupta Family Dealings

By Gabriele Steinhauser Features Dow Jones Newswires

German software maker SAP SE (SAP.XE) said it reported itself to U.S. authorities after finding that it paid 94 million South African rand ($6.6 million) to a company with ties to South Africa's controversial Gupta family to secure contracts with state-owned enterprises.

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The Guptas are at the center of a corruption scandal in South Africa for allegedly using their close relationship with President Jacob Zuma to amass personal wealth. The Guptas and Mr. Zuma have denied wrongdoing.

The scandal has drawn in several international companies, including KPMG International and McKinsey & Co., which have both launched internal probes to investigate their ties to the Guptas but denied wrongdoing.

SAP is the first Western company to say that it may have broken anticorruption laws in the U.S. by making payments to a company tied to the Guptas.

SAP said it paid a total of ZAR94 million to a company tied to the Guptas between December 2015 and November 2016 for helping it secure four contacts with South Africa's state-owned rail and port operator, Transnet, and the state power company Eskom.

The contracts earned SAP around ZAR660 million.

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The company said it had initiated disciplinary action against three staff members in relation to what it said were "indications of misconduct."

SAP launched an internal probe into alleged payments to Gupta-related companies after they were reported by South African media in July.

Preliminary findings from the probe, however, show that SAP's ties with Gupta-related companies went on for longer than previously reported.

It said that between December 2016 and June this year, it secured two further contracts with Eskom with the help of a Gupta-related entity. However, it said it hadn't yet received any revenue from those contracts or made any payments to the Gupta-related entity.

SAP said it has made presentations to prosecutors at the U.S. Department of Justice and the Securities and Exchange Commission under the Foreign Corrupt Practices Act.

Write to By Gabriele Steinhauser at gabriele.steinhauser@wsj.com

(END) Dow Jones Newswires

October 26, 2017 05:03 ET (09:03 GMT)