Economy

Cognizant Investigating “Improper Payments” Made in India

The IT firm may have fallen afoul of American anti-graft laws. Credit: Reuters

The IT firm may have fallen afoul of American anti-graft laws. Credit: Reuters

New Delhi: After retailer Walmart, it appears that IT firm Cognizant may be the latest company to have violated the US Foreign Corrupt Practices Act (FCPA) with regard to payments made to its Indian facilities.

In a early morning notification to US stock exchanges, Cognizant disclosed that it had kicked off an internal probe into whether “certain payments it made to facilities in India” violated the FCPA. In its stock exchange filing, the company also noted that it had informed the Securities and Exchange Commission and the US Department of Justice of its internal investigation.

“The company is conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act and other applicable laws,” the company’s statement said.

“The investigation is being conducted under the oversight of the Audit Committee, with the assistance of outside counsel, and is currently focused on a small number of company-owned facilities,” the statement added.

President steps down

In a separate company development also announced today, Cognizant said that its president Gordon Coburn had resigned and it was appointing India-born Rajeev Mehta, who previously looked after the firms IT services division, to succeed him. It is unclear at the moment whether Coburn’s resignation is connected with the company’s internal probe.