SAP : Additional Information on Compliance Settlement
April 23, 2024 at 05:52 am EDT
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Additional Information on Compliance Settlement
Additional Information on Compliance Settlement
April 23, 2024
We would like to provide our shareholders with additional context regarding the compliance allegations which were settled with the US Department of Justice ("DOJ") and the US Securities and Exchange Commission ("SEC") in January 2024.
Upon learning of potential misconduct in 2017, the Executive Board promptly directed SAP to engage external counsel to lead extensive, multi-year investigations in all relevant jurisdictions. As noted by the authorities, SAP cooperated fully with every regulatory body that requested information on these matters, terminated all implicated business partners and employees without delay and began implementing enhanced controls to prevent any recurrence of misconduct.
Virtually all of the conduct at issue in these investigations occurred from 2015 to 2018. The lone exception was a single instance of a sole, mid-level, employee in Azerbaijan in 2022 who gave gifts with a value of USD3000 to an official, which SAP disclosed promptly as part of its commitment to full transparency with the authorities. DOJ decided not to pursue this matter criminally.
In recognition of SAP's strong cooperation and remediation, DOJ did not require the Company to enter a guilty plea, and instead agreed to a three-year Deferred Prosecution Agreement ("DPA") with no external compliance monitor. The SEC did not require the Company to engage in a self or external monitorship.
Moreover, U.S. and South African officials specifically highlighted SAP's significant enhancements to its compliance program. The DOJ awarded a 40% reduction in penalties to SAP for this "extraordinary" effort. The South African National Prosecuting Authority ("NPA") called SAP's remedial actions "a model for corporate compliance practices going forward." And SEC cited SAP's "significant cooperation" and provision of facts as well as listing SAP's remedial efforts.
For more information, see:
SAP Integrated Report
SAP press release
DOJ press release
SEC press release
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SAP SE (Systeme Anwendungen Produkte) is the world's leader in the development and marketing of integrated software packages. Net sales break down by activity as follows:
- sale of software packages (85.9%): software for financial management, human resource management, customer relations, purchasing, etc. The group also provides maintenance services;
- consulting (14.1%): mainly consulting and training services.
Net sales are distributed geographically as follows: Germany (14.6%), Europe-Middle East-Africa (27.8%), the United States (35%), Americas (8%), Japan (4%) and Asia/Pacific (10.6%).
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