Oracle used bribery funds to bribe officials in India, the United Arab Emirates, and Turkey.
Oracle employees in its India unit used an excessive discount scheme linked to a transaction with a transportation company owned by the ministry of railways, the US Securities and Exchange Commission (SEC) said.
The US Securities and Exchange Commission (SEC) imposed a fine of more than $23 million on tech giant Oracle for violating the Foreign Corrupt Practices Act (FCPA). Oracle used bribery funds to bribe officials in India, the United Arab Emirates and Turkey in exchange for business between 2016 and 2019, according to the SECOND.
“Creating funds for kickbacks off the books inherently gives rise to the risk that those funds will be used inappropriately, which is exactly what happened here at Oracle subsidiaries in Turkey, the United Arab Emirates, and India. This matter highlights the critical need for effective internal accounting controls throughout a company’s operations,” said Charles Cain, SEC’s FCPA Unit Chief.
Oracle agreed to pay $8 million in repayment and the remaining $15 million is the penalty of the total $23 million, according to the SEC. Although he did not admit or deny wrongdoing in agreeing to settle.
“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,” said Oracle spokesman Michael Egbert. told the Reuters news agency.
Oracle employees at its India unit used an excessive discount scheme linked to a transaction with a transportation company owned by the Ministry of Railways, according to the SEC. Employees offered a hefty 70% discount on software deals to keep competitors away, the market regulator added.
the SECOND found that there was no competition, as the Indian Ministry of Railways procurement website clearly required the use of Oracle products for the project. According to the SEC’s order, one of the employees involved in the transaction maintained a spreadsheet indicating that a $67,000 margin was available to make potential payments to SOE Indian Officers.
“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 order says.
This is the second time the SEC has accused Oracle of bribing officials in India.
In 2012, Oracle’s India unit was found guilty of holding unauthorized secondary funds in distributors from 2005 to 2007. Oracle had agreed to pay $2 million to settle SEC charges of violating FCPA provisions.
