In what is not the first but, in fact, the second case of bribery allegations against Oracle in India in a decade, the US Securities and Exchange Commission (SEC) has fined the technology giant over $23 million.?
The charges are that it violated provisions of the Foreign Corrupt Practices Act (FCPA) as its subsidiaries in India, Turkey and the United Arab Emirates (UAE), and created and used slush funds to bribe foreign officials for business purposes between 2016 and 2019.
According to the SEC order, as mentioned in an ET report, ¡°Oracle India sales employees used an excessive discount scheme in connection with a transaction with a transportation company, a majority of which was owned by the Indian Ministry of Railways (¡°Indian SOE¡±). In January 2019, the sales employees working on the deal claimed the deal would be lost without a 70% discount on the software component of the deal, citing intense competition from other original equipment manufacturers¡±
Oracle Corporation reportedly needed a France-based employee to approve the request due to the size of the discount. The employee approved the discount without asking for further documentary support. The Indian SOE¡¯s publicly available procurement website indicated Oracle India had no competition as it had mandated the use of Oracle products for the project.
One of the sales employees involved in the transaction maintained a spreadsheet that indicated $67,000 was the ¡°buffer¡± available to potentially make payments to a specific Indian SOE (state-owned enterprise) official. A total of approximately $330,000 was funnelled to an entity with a reputation for paying SOE officials and another $62,000 was paid to one controlled by the sales employees involved in the transaction, as per the report.
This is the second instance when Oracle has been fined on similar grounds. Earlier in 2012, Oracle had agreed to pay a $2 million fine to settle SEC charges concerning the creation of millions of dollars of unauthorized side funds by Oracle India from 2005 to 2007, as per a Reuters report.
¡°The creation of off-book slush funds inherently gives rise to the risk that those funds will be used improperly, which is exactly what happened here at Oracle¡¯s Turkey, UAE, and India subsidiaries,¡± said Charles Cain, the SEC¡¯s FCPA Unit Chief. ¡°This matter highlights the critical need for effective internal accounting controls throughout the entirety of a company¡¯s operations.¡±
Also Read: Oracle co-founder?buys Hawaiian Island For $300 Million Then Makes It Unaffordable For Residents
Without admitting or denying the SEC¡¯s findings, Oracle has agreed to cease and desist from committing violations of anti-bribery, books and records, and internal accounting controls provisions of the FCPA. The company agreed to pay approximately $8 million in disgorgement along with a $15-million penalty.
¡°The conduct outlined by the SEC is contrary to our core values and clear policies, and if we identify such behaviour, we will take appropriate action,¡± said Oracle spokesperson Michael Egbert.
For the latest financial news, keep reading Indiatimes Worth.?Click here.