SAP, an enterprise software company headquartered in Germany, has consented to pay a minimum of $220 million in a settlement agreement to resolve bribery accusations against them. The allegations were brought up by the Department of Justice (DOJ) and the Securities and Exchange Commission (US) of the United States, as well as South Africa's National Prosecuting Authority (NPA).
The company is on trial for allegedly conspiring to bribe government officials of South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan to get business agreements, as reported by The Register.
The criminal allegations filed in the Eastern District of Virginia claim breaches of the Foreign Corrupt Practices Act (FCPA), which SAP has resolved via a three-year deferred prosecution agreement. In 2017, the business first confirmed that an investigation had taken place.
Bribery Allegations
The SEC claims that from at least December 2014 through January 2022, SAP engaged in FCPA violations via intermediaries and consultants. According to the US financial watchdog, SAP failed to adequately oversee its dealings with third parties and subsidiaries, which allowed it to register bribes as business costs legitimately.
The US Justice Department's Criminal Division Acting Assistant Attorney General Nicole Argentieri said that SAP paid bribes to executives at state-owned firms in Indonesia and South Africa to get lucrative contracts from the governments of both countries.
In a report by BBC, SAP paid South African consultants millions of dollars in fees without doing any work, and the company also paid for government leaders' travels to New York, including golf excursions. In Indonesia, it covered more explicit payments, shopping trips, and eating out.
"Today's resolution - our second coordinated resolution with South African authorities in just over a year - marks an important moment in our ongoing fight against foreign bribery and corruption," Argentieri said in a press release.
Establishing Compliance, Financial Controls
According to SAP, the company is pleased with the outcome of the lawsuit and intends to follow the agreement's provisions. It asserts that it severed relations with those responsible for the actions over five years ago and has subsequently fortified its worldwide compliance system and financial controls.
The company stated, "SAP has zero tolerance for those who do not adhere to the company's compliance policies and procedures. SAP remains vigilant in maintaining the highest standards of ethics and compliance so that, together with a global network of customers, partners, suppliers, employees, and thought leaders, SAP can help the world run better and improve people's lives."
After three years of compliance with the stated deal, the US has promised to remove the criminal accusations against the corporation.
In the most recent fiscal quarter, ending September 30, 2023, SAP reported an after-tax profit of $1.4 billion.
