AG to follow up K1.7tn fraud case
Attorney General Thabo Chakaka Nyirenda has said his office will follow up on the German software company called SAP that has been linked with corruption of government officials in various countries, including Malawi.
The firm has agreed to pay a $100 million (about K1.7 trillion) penalty to settle United States of America Securities and Exchange Commission (SEC) bribery claims.
In Malawi, SAP Africa improperly accessed tender documents to obtain a December 29 2017 contract with the Government of Malawi valued at $1 416 878 (about K2.3 billion) in exchange for improper payments to government officials, according to a ruling by US Securities and Exchange Commission.
Reacting to the development in an interview yesterday, Nyirenda said he had taken note of the information in circulation about the company through The Nation inquiry.
He said: “Thanks for this information. We will follow through this.”
In the US Securities and Exchange Commission ruling, no government officials’ names have been mentioned.
Signed by the commission secretary Vanessa Countryman, SAP was charged with violating the Foreign Corrupt Practices Act arising out of bribery schemes in Malawi, South Africa, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan.
SAP was faulted for violating the law 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 countries involved.
“It knows that the use of third parties can increase the risk of improper payments being made to secure business. In the past, these included Business Development Partners [BDPs], which were eligible to earn commissions for SAP sales. The BDP programme was terminated in 2018,” reads the ruling.
The company was also found guilty of failing to keep records and maintain an internal accounting controls system that would have been able to detect the payments.
The European Union company headquartered in Walldorf, Germany agreed to the penalty covering disgorgement and prejudgement interest to settle the SEC accusations.
SAP markets its software all over the world through various country subsidiaries, including wholly-owned subsidiaries in the said countries, which SAP manages and supervises.
Reads in part the ruling: “SAP Africa used GA Intermediary 1 to conduct business in Malawi, Tanzania, Ghana, and Kenya. GA Intermediary 1 engaged in bid-rigging and arranged corrupt payments to government officials in connection with SAP Africa deals in all four countries between 2014 and 2018.”
The ruling indicated that GA Intermediary 1 which is a Zimbabwe-based broker benefited from this deal by reselling the SAP products to the Malawi government.
It further reveals that e-mails indicate that certain SAP Africa employees, including an accounts executive and a local sales director were aware that some GA Intermediary 1 employees had moved to access draft tender documents to influence the outcome of the tender in SAP Africa’s favour.
In a scheme spanning from 2013 to 2023, SEC also found that in South Africa for example, SAP paid in 2015 for government officials’ trips to the US, including meals and golf outings, in order to win a $13.2 million contract with the city of Johannesburg.
