March 26, 2012, 12:56 PM — Five executives in SAP's China operations have either left the company or are taking a leave of absence after an internal probe uncovered wrongdoing, SAP confirmed Monday.
The executives in question include Shang Ling Jui, who headed up SAP's Shanghai Labs; globalization services chief Yueting Zhou; Hua Wang, who oversaw SAP's Business One ERP (enterprise resource planning) product; Robert Viehmann, chief of the solution assembly and packaging unit; and a manager, Oliver Wang, SAP said in a statement.
"In the course of a routine internal compliance audit, we discovered some behavior that impacted only SAP," the company said. "We do not tolerate such behavior and, as a result, took immediate action. What is important to note is that what happened impacted only SAP and not external third parties."
No replacements for the executives have been named, according to SAP spokesman James Dever, who declined to comment on the nature of the departed executives' alleged bad behavior.
Financial Times Deutschland first reported the personnel shakeup.
"These departures are significant given the common business practices of China typically do not meet international ethical standards," said analyst Ray Wang, CEO of Constellation Research. "This is significant because it shows that SAP is serious about cleaning house."
SAP views China as a crucial growth market. Last year, the vendor announced that it would spend US$2 billion through 2015 in China on new hiring, product development and efforts to expand the SAP partner ecosystem there.
Since that announcement, "we are seeing extremely positive developments in our business," the company said in a statement Monday. "SAP continues to focus on growing its network of local partners, innovating in China, expanding geographically, and hiring additional employees."
Business One, which is aimed at small business, is a key asset for SAP as it attempts to gain ground with China's millions of small businesses. The core software is sold through local partners, who tailor its processes and build add-ons to meet a particular customer's need.
SAP recently announced Business One OnDemand, a cloud version of the software that will also be sold through partners.
While partners have long offered hosting for Business One, the new version incorporates multi tenancy, an architectural approach that allows multiple customers to share the same instance of an application, but with their corporate data locked away from each other. This method cuts operational costs over regular hosting, and also allows product upgrades to be delivered to many customers at once.