Error with windows server 2008 r2 and SAP runtime

I have an msi installer that uses 13.0.7 runtime merge modules and application works great on windows 7, but on windows server 2008 r2 I get following error. This is a windows forms application using .net framework 3.5 its 32bit app

Could not load C:\Program Files (x86)\SAP BusinessObjects\Crystal Reports for .NET Framework 4.0\Common\SAP BusinessObjects Enterprise XI 4.0\win32_x86\crpe32.dll.

STACK TRACE:
CrystalDecisions.CrystalReports.Engine

SOURCE:
   at CrystalDecisions.CrystalReports.Engine.CRPE..cctor()

TARGET SITE:
.cctor