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on 26 October 2017
SAP Provides Update on Ongoing Investigation into Its South Africa Business
Discloses situation in its South Africa business to U.S. authorities
Initiates disciplinary procedures against three employees
Removes commission on public sector deals in higher-risk countries, including South Africa
WALLDORF, Germany October 26, 2017 SAP SE (NYSE: SAP) has voluntarily disclosed the situation in its South
Africa business to U.S. authorities responsible for enforcing the U.S. Foreign Corrupt Practices Act. It has initiated
disciplinary procedures against three employees and made significant changes to its global sales deal processes.
As a global company with a commitment to integrity and compliance, the past three months have been humbling for us,
said Adaire Fox-Martin, member of the Executive Board of SAP SE, who leads SAPs business in Middle and Eastern
Europe (MEE), Europe, the Middle East, and Africa (EMEA), and Greater China. The allegations of wrongdoing in our
South African business have had a profound impact on our employees, customers and partners, and on the South African
public and we apologize wholeheartedly for this.
Fox-Martin said SAP had initiated its voluntary disclosure on July 13, 2017, and that SAP has committed to full and
complete cooperation with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission
(SEC). She confirmed that the investigation by the DOJ and SEC continues.
We cannot emphasize enough how seriously the SAP Executive Board takes these allegations, or how committed we are
to managing this process in a transparent, ethical and responsible way, Fox-Martin said.
Disciplinary Measures
To date, the investigation has not revealed any evidence of a payment to a South African government official, including
Transnet and Eskom employees. It has, however, uncovered indications of misconduct in issues relating to the
management of Gupta-related third parties. To this end, SAP has instituted formal disciplinary proceedings, in accordance
with South African labor law, against three employees who were placed on administrative leave at the beginning of the
investigation. SAP has been clear from the outset that it will not tolerate misconduct or wrongdoing.
The investigation has found that the fourth employee placed on administrative leave had no material involvement with
Gupta-related parties. The employee will return to work.
Process Changes
The SAP Executive Board has decided to eliminate sales commissions on all public sector deals in countries with a
Corruption Perceptions Index (according to Transparency International) below 50, effective immediately. South Africas
rating is 45.
The SAP Executive Board has initiated on a global basis extensive additional controls and due diligence into
relationships with sales agents and value-added resellers, including additional audit functions.
SAP will allocate additional legal compliance staff to the SAP Africa market unit. They will be based in South Africa and
report into SAPs Global Compliance organization.
SAP will further strengthen its Compliance Committee in the SAP Africa region, consisting of local management,
compliance and other corporate functions, to ensure individual deal sanity and integrity, and promote compliance
generally.
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In July, SAP promised to publish findings of the Baker McKenzie investigation once completed. Since the investigation is
still ongoing, and in deference to ongoing investigations of the DOJ and the SEC, SAP cannot provide further details
currently. It is SAPs intention to release complete findings at the end of the investigation.
After SAP's initial voluntary disclosure, Baker McKenzie has spoken on SAP's behalf with prosecutors at both the DOJ
and SEC, and has started the process of sharing documents and information.
For more information, visit the SAP News Center. Follow SAP on Twitter at @sapnews.
About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run
better. From back office to boardroom, warehouse to storefront, desktop to mobile device SAP empowers people and
organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition.
SAP applications and services enable more than 365,000 business and public sector customers to operate profitably, adapt
continuously, and grow sustainably. For more information, visit www.sap.com.
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