Cognizant Technology Solutions Corporation agreed to pay $25 million to settle FCPA charges with the SEC, and two of the company’s former executives were charged Friday by the DOJ for paying bribes to an Indian government official.
Cognizant settled civil SEC charges related to violations of the antibribery, books and records, and internal accounting controls provisions of the FCPA without admitting or denying the allegations.
The company agreed to pay disgorgement and prejudgment interest of around $19 million and a penalty of $6 million.
The DOJ issued a declination to Cognizant dated February 13 and publicly released Friday under the FCPA Corporate Enforcement Policy.
In a statement, Cognizant said the DOJ declined to prosecute because of the company’s “voluntary and prompt self-reporting, comprehensive investigation, compliance enhancements, and significant cooperation.”
The SEC said that in 2014, a senior government official of the Indian state of Tamil Nadu demanded a $2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million square foot campus in Chennai.
The bribes were made to ensure a construction permit necessary to complete the development of an office campus would be issued.
The new campus was designed to support thousands of employees and become one of Cognizant’s largest facilities in India.
Cognizant’s president Gordon Coburn, 55, and chief legal officer Steven E. Schwartz, 51, authorized the contractor to pay the bribe. They also directed their subordinates to conceal the bribe by doctoring the contractor’s change orders, the DOJ said.
Coburn and Schwartz were 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.
A third-party construction firm was also authorized by Coburn, Schwartz, and others to pay two additional bribes totaling more than $1.6 million.
“The allegations in the indictment filed yesterday describe a sophisticated international bribery scheme authorized and concealed by C-suite executives of a publicly-traded multinational company,” Assistant Attorney General Benczkowski said.
Cognizant first disclosed the investigation into FCPA problems in India in September 2017.
New Jersey-based Cognizant isn’t the first technology company to run into trouble in India.
In 2012, Oracle paid a $2 million civil penalty to the SEC to settle FCPA charges arising from a slush fund in India used to pay bribes.
Harry Cassin is the publisher and editor of the FCPA Blog.