A Pune Sessions Court Orders Maharashtra Police’s Anti-Corruption Bureau to Probe Cognizant Technologies for Alleged Bribery in Permit Acquisition
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Maharashtra: The Pune Sessions Court has issued an order to the Maharashtra Police’s Anti-Corruption Bureau (ACB) to commence a thorough investigation into accusations that the IT giant, Cognizant Technologies, engaged in corrupt practices to expedite official permissions for its development projects in India.
The court’s decision came in response to a complaint by Prit Pal Singh, a retired police officer and environmental activist from Delhi, represented by lawyer Pratik Rajopadhye.
The allegations against Cognizant assert that between 2013 and 2014, the company, through a construction contractor, paid bribes to local government officials to obtain necessary permits and environmental clearances for its campus in Hinjawadi, situated on the outskirts of Pune.
This judicial action was rooted in findings from the U.S. Securities Exchange Commission (SEC), which implicated Cognizant Technology Solutions Corporation, the parent company based in the USA, in violations of the Foreign Corrupt Practices Act (FCPA). According to records, Cognizant’s U.S. entity and its Indian subsidiary purportedly acquiesced to the contractor’s advice that bribes were essential for obtaining the required clearances at both the Pune and Chennai campuses.
Singh’s plea in the Pune court was aimed at initiating legal proceedings under the Indian Penal Code and the Prevention of Corruption Act against Cognizant, its Indian construction contractor, and Manikandan Rammurthy, the former vice president of administration and real estate at Cognizant, India.
Additional Sessions Judge S B Hedaoo noted that the allegations found in the U.S. SEC’s documents provided enough basis to forward the complaint for further investigation. Judge Hedaoo expressed concern that without a prompt inquiry, potential evidence contained within the company’s electronic records could be destroyed.
“The matter would not move even an inch further unless an offence is registered against the unknown government officers involved in the alleged bribery,”
-the judge remarked, highlighting the urgency of the situation.
The court’s order detailed that in the years 2013-2014, a sum of $770,000 was reimbursed by Cognizant’s Indian subsidiary to the contractor, which had allegedly paid the bribe on its behalf concerning the Pune campus. This illicit transaction was initially uncovered during a 2016 internal audit by the parent company in the USA.
The U.S. parent company later disclosed this malpractice to the Securities Exchange Commission, resulting in a prosecution by the U.S. Department of Justice. Subsequently, the parent company conceded its wrongdoings and agreed to a $25 million penalty under a deferred prosecution agreement with the U.S. authorities, as recorded in the SEC’s 2019 order.
When approached for comments, Cognizant opted not to discuss the ongoing legal matter but affirmed its commitment to lawful conduct, stating,
“Cognizant does not comment on sub-judice matters and is committed to complying with the law.”
This case not only underscores the challenges of corporate governance and ethical operations for multinational corporations in emerging markets but also highlights the vigilance of judicial and regulatory bodies in upholding legal standards across borders.
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