US tech giant Oracle Corporation will pay a fine of $23 million to settle charges levelled by the US Securities and Exchange Commission (SEC) for allegedly bribing foreign officials in India, Turkey, and the United Arab Emirates.
The Texas-headquartered software major has been charged with violating the Foreign Corrupt Practices Act (FCPA) by using off-book slush funds to bribe officials in order to win business between 2016 and 2019.
These slush funds were also used to provide other benefits such as paying for foreign officials to attend technology conferences around the world in violation of Oracle's internal policies, the SEC order 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.
In January 2019, Oracle India 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, says the US Securities and Exchange Commission.
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.
The SEC order says that the Indian railway ministry'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 official, it adds.
A total of approximately $330,000 was funnelled to an entity with a reputation for paying Indian officials and another $62,000 was paid to an entity controlled by the sales employees responsible for the transaction, the US SEC says.
The tech giant has agreed to pay a $15 million civil fine and about $7.9 million of disgorgement and interest. It, however, did not admit to or deny the SEC's findings.
Oracle has also agreed to cease and desist from committing or causing any violations of the anti-bribery, books and records, and internal accounting controls provisions of the FCPA.
In August 2012, Oracle had agreed to pay a $2 million penalty to settle the SEC's allegations that Oracle violated the books and records and internal accounting controls provisions of the FCPA by failing to prevent Oracle India Pvt. Ltd. from keeping unauthorised side funds at distributors from 2005 to 2007.
