South Africa tries to recover over $23 mln from SAP for 'unlawful' contracts

South African investigators are seeking to recover more than Sh2.5 billion (R400 million or $23 million) from German software firm SAP for two government contracts they allege were entered into unlawfully, court documents show.

Although the amount of money sought is small for a company with a market value of €162 billion (about Sh20.5 trillion), the move by the authorities is another headache for SAP, which in 2018 admitted to misconduct over deals with South African State firms during former President Jacob Zuma's tenure.

SAP, a major global business software company, had said it was reviewing all its public sector deals in South Africa dating back to 2010. It has not, however, publicly flagged wrongdoing over the agreements in 2015 and 2016 with the Department of Water and Sanitation.

Investigators say those contracts should be declared invalid because government regulations were contravened, according to the court papers, reported here for the first time.

SAP did not comment on the specific allegations. In a statement, the company said: "SAP continues to cooperate with South African authorities/law enforcement and remains committed to the highest standards of business ethics."

"Our policy is, and always will be, to carry out all company activities in accordance with the letter and spirit of applicable laws."

The Special Investigating Unit, which is investigating the contracts, told Reuters that evidence pointing to contravention of regulations by Water ministry officials had been referred to prosecutors.

The SIU has been probing SAP's work for the Water ministry for two years, after President Cyril Ramaphosa authorised inquiries into possible procurement irregularities and corruption.