Special Tribunal orders SAP to pay SIU R500m

German multinational software company SAP has been ordered by the Special Tribunal to pay the Special Investigating Unit (SIU) R500m within seven days.

The SIU said the order stemmed from a settlement agreement reached by the SIU and SAP on the validity of two contracts awarded to SAP by Eskom. The settlement agreement was made an order of the tribunal. 

In an order by tribunal judge president Lebogang Modiba dated March 20, she declared that the order form for the SAP cloud services agreement concluded between Eskom and SAP on December 15 2016 was constitutionally invalid, and set it aside.

The SIU said that between 2013 and 2016, Eskom and SAP entered into two contracts for an enabling agreement and cloud services agreement worth about R1.1bn.

The SIU’s investigation found after Eskom entered into a contract with SAP, the German company then entered into a sale commission agreement with CAD House CC, a Gupta-linked company.

Eskom and SAP signed an agreement for cloud services at a contract value of R21.7m. After payments from Eskom to SAP, CAD House received funds from SAP.

The SIU findings showed that the enabling agreement and the cloud services agreement did not comply with the Public Finance Management Act, which resulted in Eskom incurring fruitless and wasteful expenditures in respect of the agreements.

“The order of the Special Tribunal is part of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by state institutions due to negligence or corruption.

“The settlement agreement does not absolve SAP or any implicated party from possible prosecution,” the SIU said. 

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