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South Africa

German software giant accused of paying bribes to Gupta family

The practices of Indian business family Gupta have been a hot topic in South Africa for years. Investigative journalists now say German software giant SAP also paid bribes to a Gupta company.

The powerful Gupta family from India has been accused of meddling in South African politics through close ties to President Jacob Zuma. It is believed the three Gupta brothers brokered secret deals to have a say of who gets appointed to cabinet posts and to be favored in business deals with guaranteed cuts for the Zuma clan.

German software developer SAP is also now caught up in the affair. According to investigative journalists at non-profit "AmaBhungane" the company paid 7 million euros ($8.21 million) to a company owned by the Gupta family about two years ago. The journalists assumed the bribes helped SAP secure a deal from state-owned company Transnet.

Emails from within the Gupta empire

SAP is believed to have hidden the bribes as distribution allowance of ten percent of the contract volume which was paid to company "CAD House" - the company makes 3D printers. According to local media reports, Duduzane Zuma - the son of President Zuma - owns ten percent of the Gupta company.

Journalists came across this information by going through 200,000 emails that were leaked to several South African media houses in June. Investigative journalists joined forces to manage the huge amount of emails.

Afrika Johannesburg Ajay und Atul Gupta bei Interview (imago/Gallo Images)

Indian businessmen Ajay and Atul Gupta, and the son of South African President Jacob Zuma, Duduzane Zuma, at a meeting

"We are confident that [the documents] are real," said Susan Comrie, journalist with "AmaBhungane". "The emails are from various employees…right from the heart of the Gupta [companies]."

SAP's managing director for Africa, Brett Parker, has called the allegations "unfounded and unsubstantiated." He is however been placed on leave.

Europe's biggest software giant has been trying to be more transparent in light of the recent allegations. SAP's headquarters in Walldorf has launched internal investigations and fired four of its managing directors, according to two press releases. The company doesn't want to say any more on the matter at the moment, SAP spokesperson Nicola Leske told DW in writing.

Kickbacks for lucrative deals?

SAP board member Adaire Fox-Martin traveled from Germany to South Africa to go after these allegations - together with investigators - that the company paid kickbacks to secure lucrative deals with state-owned transport company Transnet. Transnet operates trains, ports and pipelines. SAP offers software to help with administration and controls of such infrastructure.

German company SAP is a global market leader and has hundreds of thousands of customers all over the world - the software giant operates one of the most modern database systems for that particular industry.

Südafrika - Aufruhr im Parlament (Getty Images/AFP/D. Harrison)

Last year, members of the main opposition party protested against the close ties between the wealthy Gupta family and Zuma

SAP does not contest the existence of a contract with CAD House. The company insists these payments were not bribes, but compensation for a service CAD House actually delivered.

But journalist Comrie does not buy that excuse: "They are not a company - from anything that we can tell - that has any special knowledge about that product, that software."

After the scandal broke, CAD House published a new website adding the company teamed up with SAP, Comrie said. "That's interesting, because it wasn't on the website before."

More to come?

She says there was another sign that CAD House was used as disguise for illegal transactions: "They money that was paid to this company - very little of that money actually remained within that company. The money was sent to the small company CAD House and almost immediately sent out to different companies. There seems to be evidence that this money is being laundered."

In light of the scandal, SAP has said it would review all of its contracts with companies in South Africa.

SAP is not the only company that has been accused of paying bribes in light of the leaked emails. T-Systems, a subsidiary of German company Deutsche Telekom AG, has been accused of paying commissions to Gupta companies in order to score deals with Transnet.

There might be more such information in the emails - just last week, AmaBhungane journalists published another case: German company Software AG is believed to have paid up to a Gupta-run company to secure a lucrative 12-million-euro deal with state-owned company Transnet.

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