2159360 - SDM Upgrade fails: Could not detect system components

During Upgrade Process it fails with following error:

DETECT-COMPONENTS-AFTER-UPDATE_xx.LOG: PM [Error ]: The following problem has occurred during step execution: com.sap.sdt.jspm.gui.SystemDetectionException: Could not detect system components.
Could not detect deployed components. Could not synchronize the table with system component versions with SDM repository. com.sap.sdm.apiimpl.remote.client.APIRemoteExceptionImpl: Server xxxx did not accept login request as apiadmin on port xxxx - Logon failed, version of client incompatible with SDM server version or configuration. For reference check SAP note 1724516

UseCaseExec.log:

PM [Error]: A problem has occurred: com.sap.sdt.executor.exception.StepExecutionException: Problem while trying to execute operation on service  detect-components-after-update. The following problem has occurred
java.lang.reflect.InvocationTargetException. CSN Component BC-UPG-TLS-TLJ. Could not detect system components. Could not detect deployed components. Could not synchronize the table with system component versions with SDM repository.
com.sap.sdm.apiimpl.remote.client.APIRemoteExceptionImpl: Server xxxx did not accept login request as apiadmin on port xxxx - Logon failed, version of client incompatible with SDM server version or configuration. For reference check SAPnote 1724516

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SAP NETWEAVER JAVA WEB APPLICATION SERVER 6.40 and 7.00

SAP NetWeaver 7.0 ; SAP Solution Manager 7.0 ; SAP Solution Manager 7.1 ; SAP enhancement package 1 for SAP NetWeaver 7.0 ; SAP enhancement package 1 for SAP Solution Manager 7.0 ; SAP enhancement package 2 for SAP NetWeaver 7.0 ; SAP enhancement package 3 for SAP NetWeaver 7.0

SUM, SDM, Upgrade, Netweaver 6.4, Netweaver 7.0, com.sap.sdt.jspm.gui.SystemDetectionException, Could not detect system components , KBA , BC-CTS-SDM , Software Delivery Manager for Java , BC-UPG-TLS-TLJ , Upgrade tools for Java , Problem