SAP SE will pay more than $220 million to settle bribery charges brought against it by the Justice Department and the Securities and Exchange Commission.

The Justice Department announced the agreement today. According to officials, SAP and its co-conspirators ran bribery schemes in more than a half-dozen countries to increase the company’s chances of winning public sector contracts. In some cases, the software giant falsified its books by recording illicit payments as legitimate business expenses.

Between 2014 and 2017, SAP reportedly ran a scheme to bribe government officials in South Africa. The goal was to give the company “improper advantages” when competing for contracts issued by public sector organizations. The organizations the scheme targeted included the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation and electric utility Eskom Holdings SOC Ltd.

Justice Department officials determined that SAP ran a similar bribery scheme in Indonesia from 2015 to 2018. The software giant bribed government officials to help it win with deals with “Indonesian departments, agencies, and instrumentalities.” Those organizations included the Indonesian Ministry of Maritime Affairs and Fisheries as well as a telecommunications agency.

SAP reportedly employed third-party intermediaries to pay bribes. In one case, the company paid $6.7 million to “consultants” who “never performed any service.” Alongside illicit payments, SAP reportedly also provided government officials with other items of value including luxury goods.

Alongside the Justice Department investigation, the SEC carried out a probe of its own into SAP’s business practices. Officials at the latter agency determined that the software maker ran bribery schemes in not only South Africa and Indonesia but also Malawi, Kenya, Tanzania, Ghana and Azerbaijan.

The SEC found that SAP employed third-party intermediaries to bribe government officials from at least December 2014 to January 2022. Moreover, the company improperly booked the bribes as legitimate expenses. The SEC found that SAP “failed to implement sufficient internal accounting controls over the third parties and lacked sufficient entity-level controls over its wholly owned subsidiaries.”

The Justice Department stated that the software maker received credit for cooperating with the investigation. According to the department, SAP promptly provided investigators with access to internal records and significantly increased the budget of its compliance program. In acknowledgment of those steps, the Justice Department applied a “40% reduction off the tenth percentile above the low end” of the fine range.

SAP has signed a three-year deferred prosecution agreement, or DPA, as part of the settlement. The agreement will see two key charges dropped if the company meets certain conditions.

Photo: SAP