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Ex-Cognizant COO to pay $50k fine in bribery case

The case relates to Cognizant’s 2.7-million-sqft KITS campus on Old Mahabalipuram Road in Chennai that planned to employ 17,500 people.

Sep 16, 2019, 10.50 AM IST
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Bengaluru: Former Cognizant COO Sridhar Thiruvengadam has agreed to pay a civil penalty of $50,000 following a Securities and Exchange Commission (SEC) order, which found that four company executives, including the former, authorised a bribe payment in a video-conference, which violated the Foreign Corrupt Practices Act.

The case relates to Cognizant’s 2.7-million-sqft KITS campus on Old Mahabalipuram Road in Chennai that planned to employ 17,500 people. A senior government official of Tamil Nadu demanded a $2-million bribe from the construction firm responsible for the campus. The bribery exposed Cognizant to civil and criminal liability with the company paying $25 million in penalties as well as incurring $79 million more in costs related to its internal investigation.

The SEC order said Thiruvengadam devised a scheme to cover it up in the company’s books. Thiruvengadam was Cognizant’s COO from late 2013 until he was placed on administrative leave in late 2016. Cognizant accepted Thiruvengadam’s resignation last year.

The SEC order states that Thiruvengadam later helped to conceal the payment by signing false sub-certifications. It found that Thiruvengadam violated the FCPA’s internal accounting controls and record-keeping provisions. “Without admitting or denying the findings, Thiruvengadam agreed to pay a civil penalty of $50,000,” the order said.

A lawsuit filed by a group of investors on July 27 had put the spotlight on two of its former top executives — former president Gordon Coburn and former chief legal officer Steven E Schwartz. Coburn and Schwartz channelled payments to L&T, the construction company responsible for the KITS campus.

The lawsuit alleged that to disguise Cognizant’s repayment to L&T of the bribes the latter paid to government officials, Schwartz and Coburn agreed that L&T would submit many fraudulent change order requests at the end of the project totalling $2 million.

TOI has seen a copy of the order that said Cognizant engaged the contracting firm to build the facility and obtain all necessary government permits.

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