The renowned German software corporation SAP has agreed to pay $220 million to settle investigations by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice. These investigations were centered around allegations of SAP’s involvement in bribery schemes in South Africa and Indonesia, highlighting the company’s legal troubles in these regions.
SAP settles for $220 million in bribery case
The SEC and the Justice Department investigations revealed that SAP allegedly engaged in illicit activities to secure profitable government contracts. The focus was primarily on SAP’s operations in South Africa during the state capture era, which was closely linked to the Gupta family and the administration of former President Jacob Zuma from 2008 to 2018. An internal investigation by SAP in 2017 uncovered misconduct in its South African operations, particularly in dealings with the Gupta family.
Court documents indicated that SAP and its associates facilitated payments and benefits to foreign officials in South Africa and Indonesia. These benefits ranged from cash transfers to political contributions and luxury items. The primary accusation was that SAP orchestrated a scheme in South Africa through intermediaries to bribe officials and falsify records, thereby gaining an unfair advantage in securing government contracts. These dealings spanned from 2013 to 2017, involving various South African entities.
In resolving these allegations, SAP will pay $220 million. This sum includes an administrative forfeiture of $103.4 million and a criminal penalty of $118.8 million. This settlement marks a significant conclusion to the long-standing legal issues faced by SAP in these regions.
The Nigerian police force’s action on crypto exchange hacking
In a related development, the Nigerian Police Force has been active in a hacking case involving Patricia, a cryptocurrency exchange. This case underscores the increasing scrutiny and action against financial crimes in the African continent.
Between October 2021 and February 2022, Patricia suffered a significant theft of approximately ₦142.8 million ($155,734). An internal audit by Glover, the complainant, revealed the breach and identified the accounts where the stolen funds were transferred. The police investigation led to the questioning of six individuals, including two Bureau de Change traders, an Uber driver, a senior special assistant to a Nigerian governor, a driver, and a musician. However, the alleged mastermind behind the operation remains at large.
The suspects were temporarily released on administrative bail, but the pursuit of the mastermind continues. Notably, this case follows the November 2023 arrest of politician Wilfred Bonse for a ₦607 million ($750,000) hack on Patricia, with his trial set for June 2024. These cases reflect the increasing challenges and actions against financial and cyber crimes in the region.
Implications and outlook
The settlement by SAP and the ongoing Patricia hacking case illustrates a growing trend of legal accountability and enforcement in corporate and financial crimes. For SAP, the settlement closes a chapter on allegations that marred its reputation, allowing the company to focus on rebuilding its corporate integrity. It also sends a strong message to other multinational corporations about the consequences of engaging in corrupt practices.
In the broader context, these developments highlight the increasing vigilance and capability of regulatory and law enforcement agencies in tackling complex financial crimes. As these agencies become more adept at addressing such issues, companies and individuals engaged in illicit activities face greater risks of exposure and prosecution.
