The Ministry of Railways has launched an investigation into allegations that the Indian branch of technology company Oracle set up slush funds to pay bribes worth around $400,000 to officials of a railway public sector company (PSU) in 2019.
The development comes after the United States Securities and Exchange Commission (SEC) fined Oracle $23 million for setting up slush funds to bribe foreign officials in the United Arab Emirates, India and Turkey, in violation of the Foreign Corrupt Practices Act (FCPA). ).
“Regarding the SEC’s order in the Oracle matter, Indian Railways has taken cognizance of it and initiated an investigation,” the department said.
“This is an internal investigation by Indian Railways, currently no other law enforcement agencies are involved,” a senior railway official confirmed to Business Standard. “The Department is reaching out to Oracle and the US SEC to release the name of the entity involved in this matter.”
The Ministry of Railways has 12 public sector companies under its umbrella. Ministry officials could not confirm the name of the entity involved in the case. Contacted by the newspaper, official sources from the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) told the newspaper that the company “did not have any contractual association with Oracle India during the reporting period (2016-19) or after. .”
In an order dated September 27, the US regulator said Oracle India employees used “an excessive discount scheme” in a transaction with a transport company owned by the Ministry of Railways in 2019 .
“A total of approximately $330,000 was routed to a reputable entity to pay SOE officials, and an additional $62,000 was paid to an entity controlled by the sales employees responsible for the transaction,” part of the report said. the SEC order.
“The creation of off-the-books slush funds inherently gives rise to 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.
According to the SEC order, sales employees at Oracle India claimed in January 2019 that a particular deal would be lost without a 70% discount on the software component of the deal. This claim was made citing intense competition. A French employee in charge of approving the request provided the sanction without requiring proof of the request.
“In fact, the publicly accessible procurement website of the State-Owned Enterprise of India (SOE) reported 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 which indicated that $67,000 was the “buffer” available to potentially make payments to a specific Indian SOE official,” the court order states. DRY.
Oracle, without admitting or denying the findings of the SEC, has agreed to cease and desist from committing violations of the FCPA’s anti-corruption provisions, books and records, and internal accounting controls, the SEC said.