Software giant SAP ordered to pay R500m for invalid Eskom contracts

The company has been given seven days to settle the payment.

In a statement released this afternoon, the SIU says the fine stems from two invalid contracts awarded by Eskom between 2013 and 2016.

The R1.1 billion contract was for Cloud Services.

SIU spokesperson Kaizer Kganyago says the SIU investigation revealed that the agreement did not comply with the Public Finance Management Act, which resulted in Eskom incurring fruitless and wasteful expenditures.

"The SIU’s investigation found that Eskom entered into an Enabling Agreement contract with SAP for licences, maintenance, support and ad hoc services at a contract value of R1 037 045 965.50.

"Thereafter, SAP entered into a Sale Commission Agreement with CAD House CC, a Gupta-linked company.

"Furthermore, Eskom and SAP signed an agreement for Cloud services at a contract value of R21 712 514.82. Following payments from Eskom to SAP, CAD House received funds from SAP

"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" says Kganyago.

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