(This
is the second such episode for Oracle in India. Two years ago, the US
Securities and Exchange Commission (SEC) had filed a complaint against
Oracle alleging that the company's Indian subsidiary had possibly
indulged in bribery or embezzlement.)
Oracle India
looks to be in the middle of yet another bribery issue, and multiple
sources told TOI that Sandeep Mathur's sudden exit as managing director
of the company is linked to this.
Mathur quit soon after returning from an Oracle conference in San Francisco earlier this month. Shailender Kumar, group VP-key accounts for Oracle India, has taken over as interim MD.
This is the second such episode for Oracle in India. Two years ago, the US Securities and Exchange Commission
(SEC) had filed a complaint against Oracle alleging that the company's
Indian subsidiary had possibly indulged in bribery or embezzlement.
Oracle agreed to pay a $2 million penalty to settle the SEC's charges.
The latest concerns have allegedly been triggered by compliance issues
arising from a database contract that Oracle had won from the Andhra
Pradesh police department a few years back. TOI has learnt that the
issue came to light when an anonymous whistleblower wrote an email to
Oracle alleging that one of its channel partners violated its contract
norms to win the contract. Sources said that action may be taken against
several Oracle India officials.
TOI sent a mail to Oracle detailing the charges being made, but the company said it would not comment on the matter.
Mathur was responsible for multiple lines of business: technology,
applications, systems and Fusion Middleware as well as driving growth
across public sector and key accounts. Prior to his role as MD, he was
VP-technology at Oracle India. Mathur joined Oracle in 2003 as director
of Oracle Direct, North America sales.
In the previous SEC
investigation, it was found that Oracle India secretly parked with
distributors a portion of the proceeds from certain sales to the Indian
government and put the money to unauthorized use, creating the potential
for bribery or embezzlement. Oracle India's distributors allegedly held
approximately $2.2 million of the proceeds in unauthorized side funds.
The SEC alleged that Oracle India employees would then direct its
distributors to disburse payments out of the unauthorized side funds to
purported local "vendors". "Several of the "vendors" were merely
storefronts that did not provide any services. Oracle failed to
accurately record these side funds on the company's books and records,
and failed to implement or maintain a system of effective internal
accounting controls to prevent improper side funds in violation of the
FCPA, which requires public companies to keep books and records that
accurately reflect their operations," SEC said.
Several MNCs
operating in India have over the years been investigated for violation
of the Foreign Corrupt Practices Act (FCPA) of the US that bars bribing
officials of foreign governments. Following such an investigation of
Walmart in Mexico, the retailer initiated an investigation in 2012 into
allegations of bribery in its India unit. Several executives in the
India unit were suspended and some quit.
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