SAP to pay more than $220m to settle bribery charges

The settlement follows investigations by the US Securities and Exchange Commission and the US Department of Justice into alleged violations of the Foreign Corrupt Practices Act in South Africa, Indonesia and other countries

German software giant SAP will pay more than $220m to settle bribery charges following investigations by the US Securities & Exchange Commission and the US Department of Justice.

The SEC and Justice Department charged SAP with violations of the Foreign Corrupt Practices Act (FCPA) "arising out of bribery schemes in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia and Azerbaijan," according to a SEC statement Wednesday.

SAP "violated the FCPA by employing third-party intermediaries and consultants from at least December 2014 through January 2022 to pay bribes to government officials to obtain business with public sector customers in the seven countries," the SEC said.

The SEC statement said it had brought charges against SAP for the alleged FCPA violations and that SAP had agreed to the settlement. The Justice Department issued its own statement disclosing the investigations into the South Africa and Indonesia cases and the resulting settlement.

The settlement was also coordinated with "prosecutorial authorities in South Africa," said the Justice Department statement, which provided a more detailed description of the South Africa and Indonesia cases. "SAP paid bribes to officials at state-owned enterprises in South Africa and Indonesia to obtain valuable government business," said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department's Criminal Division, in the Justice Department statement.

"SAP inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted," the SEC said. "The SEC's order finds that SAP failed to implement sufficient internal accounting controls over the third parties and lacked sufficient entity-level controls over its wholly owned subsidiaries."

SAP issued its own statement acknowledging the investigations and stating that the company "welcomes the conclusion of these matters and will fully comply with the terms of the agreements."

"As noted in the settlement agreements, SAP conducted a thorough and extensive investigation into historical misconduct and fully cooperated with the authorities," the SAP statement said.

"SAP separated from all responsible parties more than five years ago and has since significantly enhanced its global compliance program and related internal controls. Our significant remediation efforts, combined with our full and proactive cooperation with the authorities, have led to full resolutions of these matters.

"SAP has zero tolerance for those who do not adhere to the company's compliance policies and procedures. SAP remains vigilant in maintaining the highest standards of ethics and compliance so that, together with a global network of customers, partners, suppliers, employees, and thought leaders, SAP can help the world run better and improve people's lives," the SAP statement concluded.

"SAP has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce," said US Attorney Jessica D. Aber for the Eastern District of Virginia, in the Justice Department statement. "We will continue to vigorously prosecute bribery cases to protect domestic companies that follow the law while participating in the international marketplace."

To settle the SEC bribery charges SAP consented to the SEC's order finding that SAP violated anti-bribery, record-keeping and internal accounting control provisions of the Securities and Exchange Act of 1934 and will cease and desist from committing those violations. SAP will pay penalties including disgorgement of $85m, plus $13.4m prejudgment interest. The SEC said that will be offset by $59m SAP will pay to the South African government for its parallel investigations into the case.

As part of the coordinated global settlement, SAP will pay the Justice Department a $118.8m criminal fine and forfeit approximately $103m, of which $85m will be satisfied by the company's payment of disgorgement under the SEC's order.