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SAP to pay $220 million to settle bribery charges
https://www.whatjobs.com/news/usa/us-business-news/sap-to-pay-220-million-to-settle-bribery-charges
By Nithya Bose in Business News, posted January 11, 2024
SAP has agreed to pay over $220 million to settle foreign bribery probes conducted by US and South African authorities.
The investigations uncovered corrupt practices involving the German software maker and its collaborators.
They facilitated bribes to foreign officials in South Africa and Indonesia through various means like cash, wire transfers, political contributions, and luxury items.
SAP will enter into a three-year deferred prosecution agreement with the US Justice Department as part of the resolution.
Under this agreement, two conspiracy charges under the Foreign Corrupt Practices Act will be dismissed if SAP fulfills specified conditions.
US Attorney Jessica Aber of the Eastern District of Virginia, where the charges were brought, said: “SAP has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce.”
SAP has also reached agreements with the Securities and Exchange Commission (SEC) and South African authorities.
The SEC conducted its own probe, revealing the alleged bribery scheme extended beyond South Africa and Indonesia.
The agency said it involved Malawi, Kenya, Tanzania, Ghana, and Azerbaijan officials, violating the Foreign Corrupt Practices Act.
SAP said it significantly enhanced its compliance program and controls.
The German software giant declared a "zero tolerance" policy for those who fail to adhere to its compliance policies.
The SEC detailed SAP's use of third-party intermediaries to facilitate bribes starting in 2014.
The agency said SAP improperly booked these payments as legitimate business expenses.
"An important moment in our ongoing fight against foreign bribery and corruption"
They said SAP received credit for its cooperation.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, said: “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.
"We look forward to continuing to strengthen our relationship with South African authorities and others around the world.
"This case demonstrates not only the critical importance of coordinated international efforts to combat corruption, but also how our corporate enforcement policies incentivize companies to be good corporate citizens, by cooperating with our investigations and appropriately remediating, so that we can take strong action to address misconduct.”
The company made employees available, collected complex financial information, and promptly captured text messages for evidentiary purposes.
SAP has taken measures to improve its compliance program, including budget increases and restructuring to ensure autonomy.
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The company is participating in a Justice Department pilot program that provides credit for executive compensation clawback.
Criminal penalty of $118.8 million
SAP will pay a criminal penalty of $118.8 million and forfeit $103.4 million.
This includes credits for amounts paid to other authorities and reductions for compensation withheld from employees.
The settlement follows a broader trend, as US and South African authorities collaborated on a $327 million settlement with Swiss industrial company ABB in December 2022 over bribery allegations related to Eskom.
Previously, SAP had settled a separate SEC foreign bribery case in 2016, agreeing to forfeit $3.7 million in profits.
SAP told the Wall Street Journal it has significantly enhanced its compliance program and controls.
The company said it has “zero tolerance” for those who don’t adhere to its stricter policies.
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