SAP Reports Itself to U.S. Authorities Over Gupta Scandal

By Gabriele Steinhauser Features Dow Jones Newswires

German software maker SAP SE has reported itself to U.S. authorities after paying 94 million rand ($6.7 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 boiling corruption scandal in South Africa for allegedly using their close relationship with President Jacob Zuma to amass great 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 it may have broken U.S. anticorruption laws by making payments to a company linked to the Guptas. It said it made payments between Dec. 2015 and Nov. 2016 to help secure four contacts with South Africa's state-owned rail and port operator, Transnet, and state power company Eskom.

The contracts earned SAP around 660 million rand.

The company said it had initiated disciplinary action against three staff members for "indications of misconduct."

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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 show that SAP's ties with Gupta-related entities lasted longer than previously reported.

SAP said that between Dec. 2016 and June 2017, it secured two further contract 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-tied company.

SAP said it had 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 Gabriele Steinhauser at gabriele.steinhauser@wsj.com

(END) Dow Jones Newswires

October 26, 2017 05:19 ET (09:19 GMT)