The US Securities and Exchange Commission (SEC) has fined Oracle $23 million for bribing officials in India, Turkey, and the UAE.
According to the US Securities and Exchange Commission (SEC), Oracle workers at its India branch utilised an excessive discount plan connected to a deal with a transportation firm owned by the ministry of railways.
Tech giant Oracle has been fined more than $23 million by the US Securities and Exchange Commission (SEC) for breaking the Foreign Corrupt Practices Act (FCPA). According to the SEC, between 2016 and 2019, Oracle used slush funds to pay off authorities in Turkey, the United Arab Emirates, and India in exchange for business.
“The creation of off-book slush funds inherently gives rise to the risk those funds will be used improperly, which is exactly what happened here at Oracle’s Turkey, UAE, and India subsidiaries. This matter highlights the critical need for effective internal accounting controls throughout the entirety of a company’s operations,” said Charles Cain, the SEC’s FCPA Unit Chief.
According to the SEC, Oracle has agreed to pay $8 million in disgorgement and the remaining $15 million in fines out of the total $23 million. Even so, by deciding to settle, it made no admissions or denial of wrongdoing.
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“The conduct outlined by the SEC is contrary to our core values and clear policies, and if we identify such behavior, we will take appropriate action,” Oracle spokesman Michael Egbert told news agency Reuters.
According to SEC, Oracle workers at its India branch engaged in a transaction with a transportation company operated by the ministry of railways that involved an excessive discount scheme. The market watchdog added that the employees provided a steep discount of 70% on software agreements to ward off rivals.
The SEC found that there was no competition since Oracle products were explicitly required to be used for the project on the Indian Railway Ministry’s procurement website. The SEC order claims that one of the workers participating in the transaction kept a spreadsheet indicating that there was a reserve of $67,000 available to perhaps pay Indian officials of the state-owned enterprise (SOE).
“A total of approximately $330,000 was funnelled 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,” said the order.
Oracle has now been accused by the SEC of bribing Indian officials twice.
Oracle’s India division was discovered to have kept unauthorised side funds at distributors from 2005 to 2007 and was found guilty in 2012. In order to resolve SEC allegations that Oracle had broken FCPA rules, Oracle had agreed to pay $2 million.