SAP says it made 'inappropriate' Oracle downloads

BERLIN -- SAP AG, the world's largest maker of business-management software, said it made "inappropriate" downloads of Oracle Corp. documents, responding to a lawsuit that claims the German company stole files from the competitor.

"We regret very much that this occurred," SAP chief executive Henning Kagermann said on a conference call yesterday . "Even a single inappropriate download is unacceptable." SAP, whose shares fell 2.1 percent yesterday , denied it had access to Oracle's intellectual property.

The admission hurts SAP's reputation as it battles with Larry Ellison's Oracle in the $56 billion market for software that manages tasks such as payroll accounting. The rivalry between SAP and Oracle escalated when Oracle filed its March 22 lawsuit claiming SAP workers hacked into a website and stole software codes on a "grand scale."

"It's very embarrassing for SAP, which has always been seen as a technology leader and also in issues such as compliance," said Ernst Konrad, the Munich-based head of equities at BayernInvest, which oversees $35 billion including SAP shares.

Shares of Walldorf, Germany-based SAP dropped 80 cents to 37.19 euros in Frankfurt. The stock has fallen 10 percent in the past year.

Shares of Redwood Shores , California-based Oracle rose 15 cents to $20.07, their highest price in more than six years, in Nasdaq Stock Market trading.

SAP said it will "fully cooperate" with the US Department of Justice, which requested documents from the company and its Bryan, Texas-based TomorrowNow unit. Bryan Sierra, a spokesman with the Justice Department , declined to comment.

A settlement with Oracle may cost SAP $100 million, Credit Suisse Group analyst James Clark and colleagues wrote in a note yesterday .