Oracle settles SEC charges over secret India payments

oracle-wiki_0.jpg.crop_display.jpg

Oracle Corp agreed to pay a $2 million fine to settle U.S. Securities and Exchange Commission charges that an India subsidiary secretly set aside money used to make unauthorised payments to phony vendors in that country.

Thursday's settlement, which involved no admission of wrongdoing, resolved charges that the world's third-largest software company violated the federal Foreign Corrupt Practices Act (FCPA).

In a complaint filed with the federal court in San Francisco, the SEC said that between 2005 and 2007, employees of Oracle India Private Ltd structured transactions with India's government that allowed distributors to 'park' $2.2 million of proceeds, 'creating the potential for bribery or embezzlement'.

The SEC said the employees directed the distributors to make unauthorized payments to local vendors, several of which did no work for Oracle, and that some payments were documented with fake invoices.

It said the set asides occurred approximately 14 times and concerned eight government contracts, and that Oracle's books and records did not properly account for them.

"Through its subsidiary's use of secret cash cushions, Oracle exposed itself to the risk that these hidden funds would be put to illegal use," Marc Fagel, director of the SEC regional office in San Francisco, said in a statement.

Deborah Hellinger, an Oracle spokeswoman, said the Redwood Shores, California-based company fired the employees responsible for the set asides, and that their activity violated the company's business practices. She also said Oracle disclosed the matter to investigators and has cooperated with the SEC probe.

The case is among the earliest in which the SEC brought FCPA charges that did not allege actual bribery of foreign officials, but rather only the potential for bribery.

"We want (companies) to have effective controls to eliminate any possible avenues for illicit payments through local partners, and we are hoping this is a good reminder," Elena Ro, an SEC lawyer who worked on the Oracle case, said in an interview.

Oracle shares closed up 48 cents, or 1.5 percent, at $32.03 on the Nasdaq.

Post new comment

<form action="/comment/reply/181483" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: &lt;a&gt; &lt;em&gt; &lt;strong&gt; &lt;cite&gt; &lt;code&gt; &lt;ul&gt; &lt;ol&gt; &lt;li&gt; &lt;dl&gt; &lt;dt&gt; &lt;dd&gt;</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-c35d95d130ba21f5964e72cf5ffca764" value="form-c35d95d130ba21f5964e72cf5ffca764" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="64843434" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>

No Articles Found

No Articles Found

No Articles Found

I want to begin with a little story that was told to me by a leading executive at Aptech. He was exercising in a gym with a lot of younger people.

Shekhar Kapur’s Bandit Queen didn’t make the cut. Neither did Shaji Karun’s Piravi, which bagged 31 international awards.