Oracle Corp to pay about $23 mn to resolve a second US SEC bribery case
Tech giant Oracle has been fined $23 million for violating the Foreign Corrupt Practices Act (FCPA) by the US Securities and Exchange Commission (SEC) on September 27 for creating slush funds for bribing funds to bribe foreign officials in United Arab Emirates, Turkey, and India. As per the 10-page order by SEC, $3,92,000 was the slush funds created by Oracle India to bribe an Indian Railway-owned Transport firm in 2019.
Referring to the company’s India operations, the SEC said Oracle India’s employees used “an excessive discount scheme” in connection with a transaction in 2019 with a transportation company owned by the Ministry of Railways.
Page 6 of SEC’s Order details the bribery practices by Oracle India Division to get contracts in a transport company owned by the Ministry of Railways. The Order details the Oracle in India with the headline ‘Improper Conduct at Oracle India’ says: “In 2019, Oracle India sales employees also 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, citing intense competition from other original equipment manufacturers, claimed the deal would be lost without a 70% discount on the software component of the deal. Due to the size of the discount, Oracle required an employee based in France to approve the request.
“The Oracle designee provided approval for the discount without requiring the sales employee to provide further documentary support for the request. In fact, the Indian SOE’s publicly available procurement website indicated that Oracle India faced no competition because 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 official. A total of approximately $330,000 was funneled to an entity with a reputation for paying SOE officials and another $62,000 was paid to an entity controlled by the sales employees responsible for the transaction.”
The Securities and Exchange Commission announced settled charges requiring Oracle Corporation to pay more than $23 million to resolve charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA) when “subsidiaries in Turkey, the United Arab Emirates (UAE), and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019,” the SEC said in a statement on Tuesday.
Earlier SEC fined Oracle in 2012 for corrupt practices in India in relation to the contracts with the Ministry of Information Technology in 2006.
 SEC fines Oracle $23 mn for bribing officials in India, Turkey, and UAE – Sep 28, 2022, Business Standard
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