SAP Sap SE

By William Boston 

BERLIN -- SAP SE, the German software company, said Wednesday that a charity set up by Hasso Plattner, SAP's chairman and co-founder, had invested in a financial-services joint venture SAP had created, but it denied any wrongdoing in not disclosing the investment earlier.

After German media reported the existence of the Hasso Plattner Foundation's investment this week, a spokesman for SAP said an extensive compliance review before the transaction turned up no conflict of interest and that neither Mr. Plattner nor Rouven Westphal, the foundation's executive director, had any operational influence over the joint venture.

SAP and Dediq GmbH, a financial services investment company, agreed in April to form a joint venture to help boost SAP's efforts to gain traction in supplying applications for financial services. SAP agreed to take a 20% stake in the venture and Dediq pledged to invest EUR500 million, equivalent to about $603 million.

"It was clear to SAP that the Hasso Plattner Foundation is a passive investor behind Dediq, but neither Hasso Plattner nor Rouven Westphal are," SAP said.

News of the foundation's investment in the venture was earlier reported on Tuesday by German business daily Handelsblatt.

SAP said it chose Dediq after an extensive search for a potential partner to boost its financial-services business.

When SAP and Dediq agreed to set up the joint venture, Dediq created a vehicle for its planned EUR500 million investment in the venture. A spokesman for Mr. Plattner and his Hasso Plattner Foundation said the foundation agreed to invest in the Dediq financing vehicle, providing a "significant amount" of the EUR500 million, but declined to name a specific number.

The spokesman said Rouven Westphal, the foundation's executive director and manager of the Hasso Plattner Family Office, conducted the negotiations. Mr. Plattner was kept outside the process, the spokesman said.

"Hasso Plattner was not involved in any way," his spokesman said, adding that the foundation was a silent investor and had no role in the venture's management or supervision.

Investors said the revelation raised questions about the governance of SAP. Mr. Plattner is one of SAP's original founders and longtime chief executive.

Ingo Speich, head of sustainability and corporate governance at fund manager Deka, raised concern that SAP didn't disclose Mr. Plattner's involvement with Dediq through his charity and said it exposed a conflict of interest.

"This will always be a gray area in this transaction because Mr. Plattner has deeper insight into SAP than any other shareholder," Mr. Speich said.

Speaking at the company's annual general meeting on Wednesday, Mr. Plattner said he would seek a two-year extension of his term. His latest term as chairman was approved in 2019 and is due to expire next year.

The foundation on its website describes Mr. Plattner as a strategic adviser "in all matters of business." It also says Mr. Plattner's wife and daughters help to approve new projects and influence strategy.

SAP said Wednesday the venture would be called SAP Fioneer and that it would start operating in the second half of the year subject to antitrust approval.

Dediq declined to comment, saying it doesn't discuss its co-investors or their investments.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

May 12, 2021 11:50 ET (15:50 GMT)

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