SAP, Europe’s largest software company, did not disclose that its billionaire chair and biggest shareholder has a personal connection to a recently announced joint venture worth hundreds of millions of euros.
The Hasso Plattner Foundation, an eponymous charity set up by the software giant’s co-founder, is a secret investor in the spinout of SAP’s financial services business alongside a Munich-based private equity firm called Dediq.
The revelations raise questions about governance and Plattner’s influence at SAP, Europe’s answer to the software giants of Silicon Valley, where since 2003 he has been supervisory chair, a non-executive role.
In April, SAP said it had formed a “strategic partnership” with Dediq to spur innovation in its financial services product portfolio. SAP said it would hold a 20 per cent stake in the joint venture and that Dediq would invest €500m.
But the $170bn market cap company, which has listings in Frankfurt and New York, did not disclose the role of the Plattner foundation and other financial links between Plattner and Dediq.
SAP confirmed that the Plattner foundation is an investor in the joint venture in response to questions from the Financial Times, but stressed that its role was as “a passive investor behind Dediq”. Handelsblatt first reported the foundation’s role earlier on Tuesday.
“The foundation takes its own investment decisions and all of the foundation’s yields are directed exclusively toward non-profit and charitable purposes. Hasso Plattner himself played no role in this deal,” SAP said.
Asked why it had not disclosed the foundation’s involvement, SAP said it had held a media briefing last month, which included a FT reporter, and that: “In that pre-briefing, we answered all questions that were directed to SAP and to Dediq”.
The company added that it had “looked into various strategic options including with other third parties and conducted thorough market research before determining that Dediq was the best match for the new venture”.
Dediq said: “As a matter of policy, we do not comment on our co-investors. Regarding the transaction with SAP, for purposes of clarity we can confirm that Mr Plattner is not an investor, and therefore has no influence and is not a beneficiary.” The firm added: “All our co-investors are passive only.”
A spokesman for Plattner said he “does not have any influence in the [Hasso Plattner] Foundation; neither in an executive nor in a supervisory role” and added: “As passive investor HPF has no control and no business involvement in Dediq.”
The Plattner foundation’s website describes Plattner as its “strategic adviser in all matters of business” and that his wife and daughters help to approve new projects and decide on strategy.
Plattner, 77, helped found SAP in 1972 and is its biggest single shareholder with a stake of about 6 per cent. He is also the owner of the San Jose Sharks, the US ice hockey team, and has a net worth of $9bn, according to a Forbes estimate.
In a 2018 Dediq presentation, the private equity firm indicated that the family office of Plattner was its sole outside co-investor.
“We invest our own capital and the capital of our co-investor Hasso Plattner Capital, the family office of the SAP founder,” said the German-language presentation seen by the FT.
Dediq’s deals include a 2017 investment into a consultancy aimed at SAP customers called ConVista. Its co-investors included entities linked to Plattner’s daughters and several Plattner associates, including an entity owned by Rouven Westphal, who heads his family office, according to publicly-available company records.
On Wednesday, SAP shareholders at its annual meeting were set to vote on the appointment of Westphal to the company’s supervisory board.
Two other Dediq investments, both in 2019, included as co-investors a Plattner family office entity, FOP Co-Investment, as well as the Westphal entity, Arrakeen Ventures.
SAP said neither Plattner nor Westphal were Dediq co-investors.
The involvement of the Hasso Plattner Foundation in the joint venture can be traced back to February, when it appears in a filing together with an entity controlled by Dediq’s managing partner, Matthias Tomann, notifying the German competition authority that they intended to set up a joint software venture together. The brief notice did not include further details.
Last month, the SAP/Dediq joint venture entity, currently owned by the same Tomann entity from the February notice, notified the competition authority of its intent to acquire the spun-out assets from SAP.
SAP’s existing financial services activities are being transferred to the joint venture, with the software giant contributing financial services-specific products, hundreds of employees and part of the joint venture’s management team.
Luka Mucic, SAP chief financial officer, told reporters last month the venture, which will be SAP branded, would be a “speedboat” that could operate more quickly and flexibly than the wider SAP group. He admitted, however, that Dediq was not a well-known player, describing it as “an entity that many of you might not immediately be familiar with.”