Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.


Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence


Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
News18 » Business
3-min read

Cognizant to Pay USD 25 Million to Settle India Bribery Charges

In April 2014, former senior executives of Cognizant, Coburn and Schwartz allegedly authorised an unlawful payment to one or more foreign government officials in India to secure and obtain a necessary permit to open a new office campus.


Updated:February 16, 2019, 12:54 PM IST
Cognizant to Pay USD 25 Million to Settle India Bribery Charges
File image of Cognizant office.

Washington: Major American IT player Cognizant will pay USD 25 million to the US Security and Exchange Commission to settle its India bribery charges, as Department of Justice filed criminal cases against two if its former top executives.

The two former executives have been charged for their roles in facilitating the payment of millions of dollars in bribe to an Indian government official, the Security and Exchange Commission (SEC) said.

Cognizant has agreed to pay USD 25 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA), the SEC said.

The complaint alleges that in 2014, a senior Tamil Nadu official demanded a 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 bribe by doctoring the contractor's change orders.

The SEC also alleges that Cognizant authorised the construction firm to make two additional bribes totalling more than USD 1.6 million.

Cognizant allegedly used sham change order requests to conceal the payments it made to reimburse the firm, SEC said.

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 Gordon Coburn, 55, and Steven 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 authorised and concealed by C-suite executives of a publicly-traded multinational company, said Assistant Attorney General Brian Benczkowski.

According to the indictment, in April 2014, Coburn and Schwartz allegedly authorised an unlawful payment of approximately USD 2 million to one or more foreign government officials in India to secure and obtain a necessary permit to open a new office campus.

To conceal Cognizant's involvement in the scheme, Coburn, Schwartz and others allegedly agreed that a third-party construction company would obtain the permit by making the illegal bribe payment and that Cognizant would reimburse the construction company through phony construction invoices at the end of the project.

The indictment further alleges that in June 2014, after the co-conspirators agreed that the construction company would make the bribe payment on behalf of Cognizant, the construction company secured the necessary government order for Cognizant to obtain the permit, allowing Cognizant to complete the development of the office campus and avoid millions of dollars in costs.

Months later, the co-conspirators are alleged to have knowingly caused Cognizant to funnel over USD 2 million to the construction company disguised as payment for cost overruns on the office campus when they knew that the actual purpose of the payment was to reimburse the construction company for the bribe payment.

According to the indictment, as Coburn, Schwartz and others had previously agreed, they hid the bribe reimbursement payment within a series of line items in a construction change order request to be paid to the construction company, thereby concealing the true nature and purpose of the reimbursement, falsifying Cognizant's books and records, and circumventing and failing to implement its internal controls.

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.

D'Souza said Cognizant undertook a comprehensive internal investigation under the oversight of the Audit Committee of the Board of Directors, with the assistance of outside counsel.

"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," he said in a statement.

The Company, it said, settled with the SEC by consenting to the entry of an administrative order. In total, the resolutions require it to pay approximately USD 28 million to the DOJ and SEC.

"This amount is consistent with the accrual previously recorded by the company," the statement added.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months. Use code FREEDOM.

| Edited by: Aditya Sharma
Read full article
Next Story
Next Story

Also Watch

Most Active
Company Price Change %Gain
Yes Bank 65.40 -8.15
Maruti Suzuki 6,228.90 0.61
Indiabulls Hsg 483.55 -7.26
Tata Motors 112.40 -9.25
SBI 277.40 -2.22
Company Price Change %Gain
Maruti Suzuki 6,222.95 0.39
Yes Bank 65.40 -8.21
Indiabulls Hsg 482.85 -7.40
Abbott India 9,016.25 0.21
Tata Motors 112.30 -9.29
Top Gainers
Company Price Change %Gain
Hero Motocorp 2,714.25 1.69
Infosys 799.45 0.85
Bajaj Auto 2,764.80 0.80
Eicher Motors 16,000.50 0.66
Maruti Suzuki 6,228.90 0.61
Company Price Change %Gain
Hero Motocorp 2,714.20 1.68
Infosys 799.55 0.84
Bajaj Auto 2,764.00 0.77
HUL 1,849.90 0.48
Maruti Suzuki 6,222.95 0.39
Top Losers
Company Price Change %Gain
Tata Motors 112.40 -9.25
Yes Bank 65.40 -8.15
Indiabulls Hsg 483.55 -7.26
Tata Steel 343.00 -4.26
BPCL 327.80 -4.22
Company Price Change %Gain
Tata Motors 112.30 -9.29
Yes Bank 65.40 -8.21
Tata Steel 343.05 -4.26
Coal India 188.75 -3.33
ONGC 121.15 -3.12

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results