SA Tribunal orders SAP to repay R400 million for irregular software contracts

SA Tribunal orders SAP to repay R400 million for irregular software contracts

Software giant SAP Africa, has been ordered to repay over R400 million ($26.5 million) to South Africa’s Department of Water and Sanitation (DWS), after two software licence and support agreement contracts between the two parties were declared constitutionally invalid and set aside by a Special Tribunal.

The software licence and support agreement contracts were to the value of more than R1 billion ($66.3 million).

According to a press release seen by TechMetro Africa, the Special Tribunal order follows an intensive investigation by the Special Investigating Unit (SIU) in the affairs of DWS, which revealed that the department irregularly concluded software license and support agreements between 2015 and 2016 with SAP, a multinational software company.

The SIU confronted DWS and SAP with evidence of wrongdoing and by agreement, the SIU together with DWS and SAP declared the contracts invalid and unlawful.

On 15 March 2022, the Special Tribunal ordered that SAP repay DWS the amount of R413 million ($27.4 million) of the R1 036 000 000 ($68.7 million) software licence contracts.

The R413 million ($27.4 million) represents the total amount paid by DWS to SAP pursuant to the 2015 and 2016 software license and support contracts.

The Special Tribunal further ordered SAP to pay DWS R263 282 173.78 ($17.4 million) within five days of the date of the order, with any remainder to be paid after the Special Tribunal’s determination of whether any further amount should be deducted from the amount due.

The SIU and DWS welcomed the Special Tribunal order saying “It sends a strong message to officials and companies doing business with the State that collusion and unethical business practice will not be rewarded.”

There are other matters enrolled in the Special Tribunal which are still awaiting adjudication to the combined value of R2.1 billion ($139 million) and will result in further recoveries for the State, concludes the statement.