Photographer: Krisztian Bocsi/Bloomberg

SAP Paid Firm Linked to South African Leader's Son for Deals

  • Tech giant hired entity in which Zuma’s son has indirect stake
  • SAP paid about 100 million rand in commissions, documents show

Global business software maker SAP SE’s South African unit agreed to pay a 10 percent commission to a company in which President Jacob Zuma’s son has an indirect stake in exchange for help in winning contracts from the country’s national railway and ports company, documents show.

SAP South Africa agreed to pay CAD House, which is partly owned by Duduzane Zuma and members of the Gupta family, about 100 million rand ($7.8 million) in exchange for "obtaining customer consent" and getting the "requisite signatures" from state-owned Transnet SOC Ltd., according to an August 2015 copy of an agreement between SAP and CAD House seen by Bloomberg News.

The papers are part of a trove of documents known as the Gupta Leaks. The amaBhungane Centre for Investigative Journalism first reported the events based on the documents.

SAP said CAD House had the necessary skills to position its solution and that it paid the sales commission for acting as an extension of the sales force.

“SAP strongly rejects allegations of kickbacks recently made by some South Africa based media,” the company said in an emailed statement. “The accusations made around the use and payment of sub-contractors 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.”

The emails and other data posted by amaBhungane are part of a series of documents that have revealed how companies controlled by South Africa’s Gupta family have won billions of rand worth of contracts from state-owned companies and how the three brothers have influenced government decisions through their closeness to President Zuma. As a result, there have been no-confidence votes in parliament, which Zuma has survived.

Holding Structure

CAD House is controlled through a series of companies that bring together the Gupta family, employees of that family’s businesses in South Africa and Duduzane Zuma, shareholding documents show. CAD House is wholly owned by Sahara Systems. That company is in turn 80 percent owned by Gupta employees and 20 percent by Sahara Holdings. Zuma, through two other companies, owns 24 percent of Sahara Holdings, while another 73 percent of the company is held by the Guptas, records show.

Duduzane Zuma, Gupta family spokesman Gary Naidoo, and President Zuma’s spokesman Bongani Ngqulunga didn’t return calls to their mobile phones. CAD House didn’t answer calls and didn’t respond to emails.

Transnet said it has been doing business with SAP since 2000. It never worked with CAD House, nor does it work through third parties, Transnet said in an emailed statement to Bloomberg.

CAD House was tasked with alerting SAP to any opportunities, according to the agreement. After the contract was signed, SAP paid CAD House 99.9 million rand as a sales commission, documents show.

CAD House is a 3D printer business, with revenue of roughly 20 million rand per year. Sahara Systems bought CAD House in 2014, according to a Sahara presentation.

The agreement between SAP and CAD House states that CAD should not make any payments to any politically connected individuals on behalf of SAP.

    Before it's here, it's on the Bloomberg Terminal.