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SAP has removed commission on public sector deals in higher-risk countries, including South Africa.

In a statement released today, German software application firm, SAP, said that it has voluntarily disclosed the situation in its South Africa business to US authorities responsible for enforcing the US Foreign Corrupt Practices Act.

It has initiated disciplinary procedures against three employees and made significant changes to its global sales deal processes.

Recent investigations have uncovered indications of misconduct in issues relating to the management of Gupta-related third parties, the SAP statement read.

SAP employs zero tolerance

As a result, the software firm has instituted formal disciplinary proceedings, in accordance with South African labour law, against three employees who were placed on administrative leave at the beginning of the investigation.

The SAP Executive Board has decided to eliminate sales commissions on all public sector deals in countries with a Corruption Perceptions Index (according to Transparency International) below 50, effective immediately.

South Africa’s rating is 45.

The investigation has found that the fourth employee placed on administrative leave had no material involvement with Gupta-related parties. The employee will return to work, the statement highlighted.

“As a global company with a commitment to integrity and compliance, the past three months have been humbling for us,” said Adaire Fox-Martin, member of the Executive Board of SAP SE, who leads SAP’s business in Middle and Eastern Europe (MEE), Europe, the Middle East, and Africa (EMEA), and Greater China.

Fox-Martin explained: “The allegations of wrongdoing in our South African business have had a profound impact on our employees, customers and partners, and on the South African public — and we apologise wholeheartedly for this.”

“We cannot emphasise enough how seriously the SAP Executive Board takes these allegations, or how committed we are to managing this process in a transparent, ethical and responsible way,” Fox-Martin said.

Baker Mckenzie investigation

According to the statement, Baker McKenzie has been contracted by SAP to continue to investigate the public-sector business in South Africa going back to 2010.

To date the investigation has determined that, between December 2014 and November 2016, SAP concluded two contracts for the sale of software to Transnet and two contracts for the sale of software to Eskom, each with the assistance of an entity currently understood to have been Gupta-related.

Read the full SAP statement here.