Oracle fined $2mn for bribery in India | business | Hindustan Times
Today in New Delhi, India
May 29, 2017-Monday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Oracle fined $2mn for bribery in India

Software giant Oracle has agreed to pay $2 million to settle US regulators' charges that its Indian subsidiary violated foreign anti-bribery laws by secretly setting aside money to make unauthorised payments to phony vendors. Phoney vendors

business Updated: Aug 18, 2012 02:33 IST

Software giant Oracle has agreed to pay $2 million to settle US regulators' charges that its Indian subsidiary violated foreign anti-bribery laws by secretly setting aside money to make unauthorised payments to phony vendors.

In a complaint filed with the federal court in San Francisco, the US Securities and Exchange Commission (SEC) Thursday alleged that from 2005-2007, Oracle India employees had distributors keep some funds off the books.

On 14 different occasions during the course of executing eight government contracts there, some Oracle India employees added some extra "margins" to deals they did with local distributors, it alleged. SEC said the funds piled up to $2.2 million and were used to make payments to third parties, some of which proved to be either non-existent entities or storefronts.

http://www.hindustantimes.com/Images/Popup/2012/8/18-08-biz4.jpg

For example, according to the SEC's complaint, Oracle India secured a $3.9 million deal with India's ministry of information technology and communications in May 2006.

As instructed by Oracle India's then-sales director, only $2.1 million was sent to Oracle to record as revenue on the transaction, and the distributor kept $151,000 for services rendered.

Two months later, Oracle India employees created and provided to the distributor eight invoices for payments to purported third-party vendors ranging from $110,000 to $396,000.

Thursday's settlement involved no admission of wrongdoing, but in a statement Oracle said: "In 2007, Oracle discovered that a few employees of its Indian subsidiary apparently had directed distributors to maintain side funds in violation of Oracle business practices."