SAP chair agrees to unwind undisclosed investment

SAP, Europe’s largest software company, promised on Thursday that it would not co-invest in any deals with a charity set up by its chair, Hasso Plattner, after the non-profit said it would divest from a joint venture agreed earlier this year.

The Hasso Plattner Foundation announced on Thursday that it would unwind its previously undisclosed stake in a deal between SAP and the Munich-based private equity firm Dediq. Major investors in the German group had raised concerns about potential conflicts of interest.

In April, SAP spun-out its financial services arm, which provides software to banks and insurers, with Dediq paying €500m for an 80 per cent stake in the business. SAP, which renamed the unit “Fioneer”, retained the remaining 20 per cent.

A month later, the Financial Times and Germany’s Handelsblatt revealed that funds from the Hasso Plattner Foundation, an eponymous charity set up by the billionaire SAP co-founder, made up a significant chunk of Dediq’s investment.

In response to the reports, SAP said that Plattner, who remains SAP’s largest shareholder, had “no personal connection” to the deal, and that the foundation was a passive investor.

But after institutional investors, and SAP employees, questioned the link, the German group launched two internal investigations.

SAP said that Duff & Phelps, a consultancy, found that assets in the joint venture were accurately priced and that law firm Gleiss Lutz confirmed that the transaction did not have to be approved by SAP’s full supervisory board.

In a separate statement, the foundation said that “the doubts raised, and accusations made . . . are misinterpreting and misrepresenting our motivation, interests and objectives”.

“We recognise, however, that what is legally correct may not always be legitimate in the eyes of all stakeholders,” it added, saying that it had decided to divest after consulting Plattner.

A spokesman for the foundation declined to reveal the precise value of its stake in Fioneer, but confirmed that while it was substantial, it was less than a majority of the €500m invested by Dediq.

He added that until a replacement investor was found, Dediq would have “full access to all the committed capital”, and that the joint venture would not be held up.

The foundation said it was also taking this step to rule out future conflicts of interest that could arise owing to the appointment in May of Rouven Westphal to SAP’s supervisory board. Westphal also sits on the charity’s executive board.

“We strongly believe in the success of Fioneer and would actually have liked to remain invested,” Westphal said. “We will make sure that those who follow us as passive investors share the same goals and values as we do”.