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UPDATE 1-Germany's Software AG starts probe into S.Africa kickback reports

(Adds South Africa parliamentary probe)

FRANKFURT/CAPE TOWN, July 25 (Reuters) - Software AG is launching an internal investigation after a media report alleged it had paid kickbacks as part of a wide-ranging South African scandal in which fellow German software maker SAP has also been caught up.

"Software AG is not aware of any non-compliant business practices in its South Africa operations," a company spokesman told Reuters, but added: "Based on current media speculations, the company has started an internal review."

The spokesman said Software AG cannot make further comment until its review has been completed.

The report, published jointly on Tuesday by the Amabhungane and the Daily Maverick's Scorpio investigative reporting teams, alleges Software AG entered into an apparent kickback deal with a politically connected South Africa family to win contracts.

It said Software AG agreed to pay an intermediary company linked to the Gupta family, who are close allies of President Jacob Zuma, in order to win deals with state-controlled companies or agencies or private firms.

Zuma and the Gupta family have denied wrongdoing.

Earlier this month, SAP named a new executive team in South Africa after it put four senior managers on leave, pending its investigations into allegations that it was involved in paying kickbacks to win government contracts.

Leaked emails and a report by the country's Public Protector in late 2016 have also spawned a score of legal challenges by opposition parties and civil society calling for the prosecution of officials.

On Tuesday South African lawmakers held a preliminary meeting into graft allegations involving billion-rand coal contracts at state-owned power utility Eskom.

Parliament's public enterprises committee is investigating allegations that former chief executive Brian Molefe and chief financial officer Anoj Singh were influenced by the Gupta brothers to unfairly award them massive coal supply contracts.

Both Molefe and Singh have denied any wrongdoing. (1 euro = 15.1280 rand) (Additional reporting by Wendell Roelf in Cape Town; Editing by Keith Weir)