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SAP rips and replaces South African bosses amid corruption probe

Investigation launched into allegations of kickbacks-for-contracts

SAP has installed an acting managing director and acting chief financial officer at its scandal-hit South Africa subsidiary.

This comes after the German software giant suspended four senior managers at the SA operation, and launched a probe into claims bribes were used to secure a top government contract.

Late on Friday, SAP announced veteran exec Claas Kuehnemann will be interim boss, and Peter David, a senior SAP EMEA beancounter, will be interim CFO.

Kuehnemann will oversee the company's activities in 51 countries in its Africa portfolio, and attempt to steady the ship as it sails through a storm of corruption allegations.

It all kicked off last week when journalists accused SAP's South African subsidiary of using a shell company to dish out kickbacks to bag a government tech deal. Executive board member of SAP EMEA Adaire Fox-Martin has flown down to South Africa take control of an investigation into the brouhaha.

"SAP stands for integrity, transparency and compliance," said Fox-Martin. "We strive to be exemplary in the manner in which we serve our customers and partners, and in how we treat our employees. Full transparency and integrity are imperative at our company, and we will not tolerate any misconduct."

The corruption claims stem from leaked emails that appear to show SAP SA agreed to pay over 100 million rand ($7.8m, £5.9m) in sales commissions to a small 3D-printing firm part owned by a politically influential family and the son of the country's president. In exchange, it is claimed, SAP SA was handed a lucrative contract with the state transport agency Transnet.

The documents were obtained by the reliable non-profit amaBhungane Centre for Investigative Journalism, which highlighted the similarities between this case and the stench of corruption hanging over SAP's Panama subsidiary.

"SAP strongly rejects allegations of kickbacks recently made by some South Africa-based media," the software biz said in a statement shortly after the allegations emerged.

"The accusations made around the use and payment of subcontractors are unfounded and unsubstantiated. SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest global compliance and legal standards."

Be as that may, as things now stand: the South African senior management team has been put on leave, two bigwigs have been parachuted in to take over, an executive board member is taking names and asking questions, and SAP has hired the international legal firm Baker McKenzie to get to the bottom of it all. ®

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