A lot of US-based companies have reportedly been under scrutiny since 2016 for alleged corrupt practices in India. Last week, Uber also joined the list as the company revealed that the US Department of Justice (DoJ) is examining the company for “improper payments” made in around four countries, which also includes India. The company disclosed this information during its initial public offering (IPO) prospectus.
Furthermore, Cognizant, which is an IT service company, also joined the club. ET reported that Cognizant would be liable to pay $28 million in fines to the US Securities and Exchange Commission (SEC). The company is reportedly accused of bribing India to get building permissions. The report also asserted that Larsen & Toubro denied claims of “facilitating the payments.”
The report has also revealed the list of a dozen companies that “have been pulled up by the SEC for alleged corrupt practices in their Indian units. The list includes Embraer, Fortune 500 medical technologies firm Stryker Corp and healthcare company Alere Inc. These are covered by the Foreign Corrupt Practices Act (FCPA), which stipulates that US companies are prohibited from such actions even outside the country.”
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“If we are determined to have violated the FCPA or similar laws, we may be subject to criminal sanctions and other liabilities, which would adversely affect our business, financial condition and operating results,” Uber said. Besides, the report also revealed that as a fine, Stryker paid a hefty amount, which is $7.8 million, for losing adequate control in place to track kickbacks. “Stryker’s India subsidiary failed to maintain complete and accurate books and records,” US Securities and Exchange Commission asserted in a September 2018 order.
“Under US laws, a company is obliged to disclose any FCPA violations. Even if the company management is not involved, they still have to disclose the violation as soon as it comes to their knowledge,” said Finsec Law Advisors founder Sandeep Parekh. “While such cases may have been closed in the US, Indian authorities can also pursue them through our domestic anti-corruption laws.”