Filing: SAP co-CEO had concerns about TomorrowNow deal

SAP co-CEO Henning Kagermann was worried at one point about the legal risk of buying TomorrowNow, according to court documents.

SAP co-CEO Henning Kagermann allegedly held strong concerns at one point about the legal implications of buying TomorrowNow, the now-shuttered SAP subsidiary tied to a lawsuit filed by rival vendor Oracle.

A Nov. 10 filing by Oracle in U.S. District Court, California Northern District, includes a partial transcript of a deposition taken from Kagermann in September. At one point in the excerpt, an attorney for Oracle refers to a Jan. 6, 2005 e-mail message written by former SAP executive board member Shai Agassi.

"Now, I'm showing this to you so you can see what Mr. Agassi wrote, because he reports something attributed to you that I want to ask you about," said attorney Geoffrey Howard. "He writes on January 6, a week before [SAP employee James Mackey's] e-mail announcing the beginning of due diligence, that, quote, 'Henning sees legal as a show-stopper. ...' Did you, as of January 6, see legal as a show-stopper on the deal?"

"I don't recall," Kagermann replied, according to the transcript.

Kagermann said "no" when Howard asked whether he "had any reason to doubt the accuracy" of Agassi's remark in the e-mail.

TomorrowNow, which SAP bought in February 2005, provided third-party support for Oracle applications, including PeopleSoft, J.D. Edwards and Siebel. Oracle filed suit in March 2007, claiming that TomorrowNow workers illegally downloaded material from Oracle's support systems and used them to woo Oracle customers.

The vendor also claims that with the knowledge of SAP's executive board, workers "made thousands of copies of Oracle's underlying software applications on its computer systems," and used them for training, customer service and "generally to support a business model that was illegal to its core."

SAP acknowledged in July 2007 that TomorrowNow staff members made "inappropriate downloads" from Oracle's Web site, but has strongly rejected Oracle's claims of a wider pattern of malfeasance.

Another filing Oracle made on Nov. 10 includes an internal SAP presentation outlining the business case for buying TomorrowNow, a document Oracle has referred to in the past.

"The access rights to the PeopleSoft software is very likely to be challenged by Oracle and past operating issues may be a serious liability if Oracle challenges (i.e. offsite production copies and the form of delivery of regulatory updates may be subject to Oracle challenge)," the business-case presentation states at one point.

Howard questioned Kagermann about the business case as well, according to another deposition excerpt.

"At the time you participated in the decision to approve the acquisition of TomorrowNow, were you, personally, confident that TomorrowNow's access to PeopleSoft software was legal?" Howard asked.

"I assume so. Yes," Kagermann replied.

Agassi could not be reached on Tuesday. An SAP spokesman did not immediately respond to a request for comment. An Oracle spokeswoman declined to comment.

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