Securities Trading Act Violation Resulting in EUR 1.75 Million Fine for SAP by Bafin
SAP Faces Fine for Inadequate Financial Report Disclosure
Software giant SAP has been penalized by the financial regulator Bafin, amounting to 1.75 million euros, for insufficient information provided in the publication of its financial report. The fine was imposed on May 14, following SAP's violation of the Securities Trading Act (WpHG) by not announcing the location and accessibility of the annual financial report for the fiscal year 2022.
According to regulations under the WpHG, companies in Germany are required to publish their annual financial reports and make them publicly accessible. This includes disclosing the date the reports can be accessed and specifying the website where they can be found. Additionally, companies must notify the Federal Financial Supervisory Authority (BaFin) and the public about the availability of their financial reports through a public announcement.
In this case, SAP failed to comply by not announcing the internet address and accessibility of the annual financial report. Investors rely on this information to make informed decisions, making this breach of regulations significant. SAP can appeal the decision.
As for SAP's diversity goals, the company has received criticism for scaling back its initiatives in response to the policies of US President Donald Trump. An internal email to employees revealed that SAP would no longer strive for a 40 percent female workforce and would no longer include the USA in the quota for female executives. The board remuneration is also shifting, with diversity no longer serving as a benchmark for short-term bonuses. Instead, employee health will be the focus. Trump had discontinued diversity programs within the government shortly after taking office and urged companies to follow suit. Given that SAP generates approximately 40 percent of its revenue in the USA, this decision may have significant implications.
Companies in Germany must adhere to stringent regulations concerning the disclosure and announcement of financial reports under the WpHG. Failure to comply with these regulations can result in financial penalties.
What about the technology SAP uses for the dissemination of its financial reports? It's crucial that such systems are accessible and announceable to investors for making informed decisions.
Moreover, the ongoing debate about SAP's diversification efforts in the business world becomes more intriguing when considering the potential impact on its technology investments, as the company generates a significant portion of its revenue in the USA.
