𝗚𝗲𝗿𝗺𝗮𝗻 𝗳𝗶𝗿𝗺 𝘄𝗵𝗶𝗰𝗵 𝗽𝗮𝗶𝗱 $𝟴𝟬𝟬,𝟬𝟬𝟬 𝗯𝗿𝗶𝗯𝗲𝘀 𝘁𝗼 𝗧𝗮𝗻𝘇𝗮𝗻𝗶𝗮𝗻 𝗼𝗳𝗳𝗶𝗰𝗶𝗮𝗹𝘀 𝗳𝗶𝗻𝗲𝗱 𝗯𝘆 𝗨.𝗦. 𝗮𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝗶𝗲𝘀
* Tech giant SAP accused of bribing Tanzania Ports Authority (TPA) officials in 2014/15 to win a tender
* Ex-TPA boss Madeni Kipande and 5 other port officials were charged at a Dar es Salaam court with economic sabotage over the deal in 2022
* SAP will pay $222 million to Wall Street's top regulator to settle bribery investigations in seven countries, including Tanzania
January 14, 2024
𝑩𝒚 𝑻𝑩𝑰 𝑹𝒆𝒑𝒐𝒓𝒕𝒆𝒓
Dar es Salaam
German software giant SAP has agreed to pay about $222 million to the United States Securities and Exchange Commission (SEC) to resolve investigations into bribery schemes in seven countries, including Tanzania.
The violations of the U.S. Foreign Corrupt Practices Act (FCPA) arise out of bribery deals against the global software company in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan.
SAP's payout includes a $118.8 million criminal fine and $103.4 million of forfeiture, the U.S. Justice Department said.
In a statement, SAP said it welcomed the settlements.
The company "has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce," U.S. Attorney Jessica Aber in the Eastern District of Virginia said in a statement.
Authorities said the alleged bribery schemes spanned from 2013 to 2022, and involved falsifying SAP's books and records so the bribes would appear to be legitimate business expenses.
The Tanzanian bribery allegations are linked to a 2014/15 enterprise resource planning (ERP) software tender worth over $6.635 million that involved the provision of software licences and services to the Tanzania Ports Authority (TPA).
An anonymous whistleblower claims that senior TPA officials were paid $800,000 bribes (about TZS 2 billion) to award the tender to a partner company of the German software firm.
The TPA tender was awarded to Zimbabwe-registered Twenty Third Century Systems (TTCS), which is the partner of the German tech company SAP across Africa and the Middle East.
The Tanzanian kickbacks were paid in cash stuffed in suitcases to TPA officials in two installments.
TPA officials initially received $100,000 prior to the tender award and the remaining $700,000 was paid after the tender was awarded.
A top former TPA official is alleged to have met with a representative of SAP/TTCS at the Southern Sun Hotel in Dar es Salaam where they colluded to create the draft tender document to ensure that only the SAP/TTCS bid could meet the technical requirements, thereby effectively eliminating competitors.
TPA eventually awarded the tender to TTCS although several other companies submitted bids that were much cheaper.
In 2022, former TPA Managing Director Madeni Kipande and 5 other senior officials of the ports authority were charged with economic sabotage and causing a loss of TZS 4.2 billion to TPA over the tender.
Other former TPA officials facing criminal charges in the ongoing case are human resource officer Peter Gawile, procurement board chairman Casmily Lujegi, procurement director Mashaka Kisanta and acting ICT director Kilian Chale.
Prosecutors said the former TPA officials abused public office by issuing tender number AE/016/2014-15/CTB/G/39 in 2015 with the intention of soliciting bribes worth $1,857,908.04.
A special value for money audit conducted by the Controller and Auditor General (CAG) uncovered that TPA awarded the contract to TTCS in October 2015 for supply, installation, testing and commissioning of an ICT system for the ports authority.
TTCS was supposed to complete implementation of the ICT installation project within 9 months, but failed to deliver, forcing TPA to terminate the contract in March 2019.
By the time the contract was terminated, TPA had already paid TTCS more than $4.63 million although the company had failed to deliver the required ICT system.
The government audit also uncovered that TTCS grossly overcharged TPA for annual software license fees.
TPA paid $404,029.03 in annual software licence fees, while government auditors established that the ports authority was actually required to pay $190,643.70 in annual fees.
In another bizarre move, in September 2019 TPA paid the same German company SAP a total of $433,011, to review the work done by its partner TTCS.
TPA also awarded another contract worth $997,647 to SAP for unspecified services.
The review revealed that TTCS had only installed 7 modules out of a total of 26 modules required to complete the ICT system.
The government audit established that TPA awarded various contracts to TTCS and SAP, contrary to procedure, without consulting the e-Government Authority nor the Attorney General's Office.
It could not be immediately established if Tanzania will receive any share of the $222 million fines paid by SAP to U.S. authorities.
