Oracle Corporation fined $23 million for alleged corruption in India, Turkey and the United Arab Emirates

In what is not the first but, in fact, the second case of corruption allegations against Oracle in India in a decade, the United States Securities and Exchange Commission (SECOND) fined the tech giant more than $23 million.

The charges are that he violated the provisions of the Foreign Corrupt Practices Act (FCPA) as subsidiaries in India, Turkey and the United Arab Emirates (UAE), and established and used slush funds to bribe foreign officials for business purposes between 2016 and 2019.

Oracle Corporation fined $23 million for allegedly bribing officials in India, Turkey and UAE

According to the order of the SEC, as mentioned in a HEY report, “Oracle India Sales Employees Used Excessive Discount Scheme in Transaction with Transportation Company, the majority of which belonged to the Indian Ministry of Railways (“Indian SOE”). In January 2019, sales employees working on the deal claimed the deal would be lost without a 70% discount on the software component of the deal, citing intense competition from other equipment manufacturers. of origin »

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Oracle Corporation would have needed an employee based in France to approve the request due to the size of the discount. The employee approved the discount without asking for additional proof. The Indian state-owned company’s public procurement website stated that Oracle India had no competition as it had mandated the use of Oracle products for the project.

One of the sales employees involved in the transaction maintained a spreadsheet which indicated that $67,000 was the “buffer” available to potentially make payments to a specific Indian SOE (state-owned company) official. A total of about $330,000 was funneled to a reputable entity to pay SOE officials and another $62,000 was paid to an entity controlled by sales employees involved in the transaction, according to the report.

This is the second time Oracle has been fined on similar grounds. Earlier in 2012, Oracle agreed to pay a $2 million fine to settle SEC charges regarding the creation of millions of dollars of ancillary funds not authorized by Oracle India from 2005 to 2007according to a Reuters report.

“The creation of off-the-books slush funds inherently creates the risk that these funds will be used inappropriately, which is exactly what has happened here at Oracle’s subsidiaries in Turkey, the United Arab Emirates and India,” said Charles Cain, head of the SEC’s FCPA unit. “This case highlights the critical need for effective internal accounting controls throughout a company’s operations.”

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Oracle agrees to pay $23 million fine

Without admitting or denying the SEC’s findings, Oracle agreed cease and desist from committing offenses anti-corruption provisions, books and records and internal accounting controls of the FCPA. The company agreed to pay approximately $8 million in reimbursement as well as a $15 million penalty..

“The conduct described by the SEC is contrary to our core values ​​and clear policies, and if we identify such behavior, we will take appropriate action,” said Oracle spokesman Michael Egbert.

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Sharon P. Juarez