SEC Charges Global Software Company with Bribery

Published: 22 January 2024

USA SEC BuildingThe U.S. The Securities and Exchange Commission building. (Photo: Alan Sheffield, Flickr, License)

By Fatima Karimova and Mahmut Tekinalp

The U.S. The Securities and Exchange Commission (SEC) has charged SAP, a multinational software company, with violating  the Foreign Corrupt Practices Act by bribing government officials at least in seven countries including  South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan.

According to the Jan. 10 official press release, between December of 2014 and January of 2022 “SAP employed third-party intermediaries and consultants to bribe government officials to obtain business with public sector customers in the seven countries.”

The company, based in Germany, “inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted.”

The multinational company, which sells software licenses and related services to 263,000 customers in 188 countries, agreed to pay more than $220 million to settle the bribery charges.

In a statement, the company said it had fully cooperated with the investigators, noting,  “SAP has zero tolerance for those who do not adhere to the company’s compliance policies and procedures. SAP remains vigilant in maintaining the highest standards of ethics and compliance.”

In Azerbaijan, the case involved a contract worth more than US$1.6 million between SAP and the state-owned oil giant SOCAR, according to the SEC order. In an effort to close the deal, the order says,  an employee of a SAP subsidiary, SAP Azerbaijan,  provided “improper gifts" on Dec. 9,  2021, and in January of 2022 to multiple SOCAR officials.

“Several SOCAR officials received gifts totaling approximately $3,000, well above SAP’s gift limit of $30.” the order states. “Text messages indicate that the employee was rewarding senior officials who supported, and were directly responsible for, approving the pending sale.”

According to the US court documents, the SAP Azerbaijan employee also submitted fake documentation to SAP indicating the deal with SOCAR had closed on Feb. 4, 2022, when in reality it closed three months later on May 12. The change was made so that the employee could collect a commission on the deal before being promoted to “SAP Azerbaijan Managing Director”, the documents state. Upon promotion, “she would not be eligible to earn additional compensation from the sale.”

While the US documents did not name the woman, in April of 2022 an Azerbaijani business news siteannounced that Svetlana Yankina had been named managing  director of SAP’s Azerbaijani office, which corresponds with official Azerbaijani tax registry records identifying her as “legal representative”. She remained in that position until November 2022.

According to her LinkedIn account, from April of 2015 until her appointment as managing director of SAP’s Azeri office, she was also a “global account director” responsible at SAP for SOCAR.

“I have good experience for adding value to the operations, maintenance and projects of SOCAR operated assets,” she wrote. “Based on the world trends in [the oil and gas] industry together with SOCAR we are going on the road named ‘Digital Transformation’, which will allow the company to quickly change the mainstream to follow trends.”

Approached by OCCRP reporters, Yankina refused to comment, saying she left the company more than a year ago. SOCAR also didn’t respond to questions.

It is not the first time SAP has been charged in a bribery case. In 2016, SEC charged SAP with “books and records and international accounting controls violations in connection with a bribery scheme in Panama.”