Recent investigations by the South African investigative journalist group, amaBhungane, have found evidence of multinational companies in South Africa providing illegal payments to secure contracts with the government owned transport and logistics company, Transnet. The companies that currently stand accused include the German companies SAP and T-systems, as well as the Swiss based Liebherr International AG, China South Rail, Shanghai Zhenhua, McKinsey and Neotel. ((http://amabhungane.co.za/article/2017-07-16-guptaleaks-more-multinationals-ensnared-in-transnet-kickback-web )) The seven companies are all alleged to have paid kickbacks to companies connected to the influential Gupta family with close ties to president Zuma.
The current investigation alleges that the business software giant, SAP, agreed to pay a 10% sales commission to a company controlled by the Gupta’s in order to gain contracts from Transnet, the state owned transport and logistics company. Over the course of 2016 SAP apparently paid a Gupta owned company approximately R99.9 million (about 6 million eur) which suggests that SAP used this influence to drive sales of a billion rand to Transnet. According to the journalists at amaBunghane, Transnet was so important to SAP that it was labelled a ‘strategic customer’. ((http://amabhungane.co.za/article/2017-07-11-guptaleaks-software-giant-sap-paid-gupta-front-r100m-kickbacks-for-state-business ))
SAP has launched an internal investigation into the allegations and has suspended four South African managers ((https://www.timeslive.co.za/news/south-africa/2017-07-13-sap-suspends-sa-staff-after-allegations-of-gupta-kickbacks/)). The company has denied the allegations and claimed that it operates in accordance with its corporate code of ethics. ((http://www.iol.co.za/business-report/corporatecorruptionreport-sap-in-gupta-damage-control-mode-10284883)) However this is not the first time in recent years that the company has faced a bribery case, last year SAP agreed to settle a case in Panama where an executive was found to have paid bribes to secure lucrative government contracts ((http://www.reuters.com/article/us-sap-se-sec-idUSKCN0VA3HW)).
Similar allegations have been made against the other six companies who are also alleged to have paid bribes to companies linked to the Gupta’s for Transnet contracts. Questions have been raised about the German company T-systems in relation to both Transnet contracts as well as to Eskom, the state owned electricity company. In addition to this, KPMG was the auditor of many of these transactions. It claims that it stands by its audits for these agreements. KPMG is now being investigated for possible audit irregularities in relation to the Gupta’s funnelling of government money for private expenses ((https://mg.co.za/article/2017-07-07-audit-regulator-refers-irregularities-found-at-transnet-eskom-for-investigation))
While the corruption charges in and of themselves are significant, the relationship between the Gupta’s and president Zuma has for a number of years been in question due to the undue influence that the family exerts over political decision-making and in particular due their relationship with Jacob Zuma. The family is accused of wielding enormous political influence in SA and exerting this to benefit its own business interests. (( http://www.bbc.com/news/world-africa-22513410 )). Recent emails and evidence has shown that the Gupta family have enormous influence over cabinet ministers and state owned companies, such as Transnet and Eskom. The Gupta’s have business interests in mining, air travel, energy, technology and media. The corrupt behaviour by SAP and other multinational companies participating in kickbacks and extortion schemes which benefit the Gupta’s only strengthen this wealthy family and serve to undermine the democracy in South Africa.