US-based technology major Cognizant Technology Solutions has agreed to pay a hefty penalty of $25 million (around Rs 170 crore as per current exchange rate) to the US Securities Exchange Commission (US-SEC) in connection with a case of bribery in Tamil Nadu and Maharashtra.
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The company is supposed to deposit the sum within 10 days of the judgement (February 25), the US-SEC ruling said.
The IT company has been asked to pay the penalty for alleged bribes to the tune of $3.6 million (about Rs 25 crore) between 2014 and 2016 to Indian government officials in Tamil Nadu and Maharashtra to secure permissions for constructing a tech campus.
The case came to light in September 2016 after Cognizant made a confession to the US-SEC.
Cognizant’s construction project in Chennai, referred to as the Knowledge Industry Township (KITS) campus, represents the company’s largest owned facility in India, encompassing 2.7 million square feet with a capacity for approximately 17,500 employees. Cognizant engaged a contracting firm to build the facility and obtain all necessary government permits. Construction began in 2011 prior to the issuance of a required planning permit.
“Between 2014 and 2016, Cognizant, acting through executives in the United States and India, authorised contractors to pay on the company’s behalf and reimbursed them for a total of approximately $3.6 million in bribes to Indian government officials to obtain government construction-related permits and operating licences in connection with the construction and operation of commercial office buildings,” the ruling by SEC said.
In 2014, Cognizant authorised a contractor to pay a $2-million bribe to a senior government official for the issuance of a planning permit for a project in Chennai, it added.
Cognizant had bribed government officials to secure permits, ranging from environment clearance to power among others, to build its technology campuses in Chennai and Pune.
As per the break-up of the penalty to be paid by Cognizant, it was asked to pay disgorgement (a situation in which a person or organisation is forced to pay back money they have made in an illegal way) of $16.39 million (about Rs 110 crore), prejudgement interest of $2.8 million (about Rs 20 crore), and a civil monetary penalty of $6 million (about Rs 43 crore) to the SEC for transfer to the general fund of the United States Treasury.
“In view of the foregoing, the commission deems it appropriate to impose the sanctions agreed to in Respondent Cognizant’s offer,” the ruling by the US District Court said.
It has been established that senior officials from the company have paid $6.14 million (about Rs 43 crore) as bribes to government officials in Tamil Nadu and Maharashtra — spanning between 2009 and 2016.
In an order, the US-SEC has accepted the Offer of Settlement by Cognizant Technology Solutions Corporation.
Download Press Release:SEC.gov _ SEC Charges Cognizant and Two Former Executives With FCPA Violations