Washington: Major American IT player Cognizant will pay USD 25 million to the US Security and Exchange Commission (SEC) to settle its India bribery charges, as Department of Justice filed criminal cases against two if its former top executives.
The two have been charged for their roles in facilitating the payment of millions of dollars in bribe to an Indian government official, the SEC said. Cognizant has agreed to pay USD 25 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA), the SEC stated.
The complaint alleges that in 2014, a senior Tamil Nadu official demanded an USD 2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million square foot campus in Chennai.
As alleged in the complaint, Cognizant’s president Gordon Coburn and chief legal officer Steven E Schwartz authorised the contractor to pay the bribe and directed their subordinates to conceal the incident by doctoring the contractor’s change orders. The SEC also alleges that Cognizant authorised the construction firm to make two additional bribes totaling more than USD 1.6 million. The company then allegedly used sham change order requests to conceal the payments it made to reimburse the firm.
The SEC charged Coburn and Schwartz with violating anti-bribery, books and records, and internal accounting controls provisions of the federal securities laws. The SEC is seeking permanent injunctions, monetary penalties, and officer-and-director bars against Coburn and Schwartz.
In a separate statement, the Department of Justice said Coburn, 55, and Schwartz, 51, have been charged in a 12-count indictment with one count of conspiracy to violate the FCPA, three counts of violating the FCPA, seven counts of falsifying books and records, and one count of circumventing and failing to implement internal accounting controls.
The allegations in the indictment filed Thursday describe a sophisticated international bribery scheme authorized and concealed by C-suite executives of a publicly-traded multi-national company, said assistant Attorney General Brian Benczkowski.
In a statement, Cognizant said it has resolved the previously disclosed investigations by the Department of Justice and SEC into whether payments relating to permits and licenses for certain real estate facilities in India violated the US FCPA.
“We are pleased to reach these resolutions with the US Department of Justice and the US Securities and Exchange Commission. With today’s announcements, we’ve taken a major step forward in putting this behind us,” said Francisco D’Souza, vice chairman and CEO of Cognizant said in a statment.
“We have also made further enhancements to our compliance processes, procedures and resources. It is important to note that this entire matter did not involve our work with clients or affect our ability to provide the quality services our clients expect from us,” D’Souza added.
PTI