Cognizant finds improper payments of $6 mn made in India to obtain permits, licences
To date, of the identified $6 million in potentially improper payments, Cognizant has now recorded a total of $4.1 million in corrections, Karen McLoughlin, CFO said.
New Delhi: US-based Cognizant said on Wednesday that it has identified "potentially improper payments" worth $6 million being made for company-owned facilities in India, higher than the earlier estimate of $5 million.
In September last year, Cognizant had said it was conducting an internal investigation into possible violations of the US Foreign Corrupt Practices Act amid allegations that the IT major had made "improper payments to obtain permits and building licences in India".
"The investigation has progressed significantly. We have identified a total of approximately USD 6 million in potentially improper payments relating to Company-owned facilities in India, an increase of USD 1 million from what we reported at the end of the third quarter," Cognizant CFO Karen McLoughlin said on a concall.
During the fourth quarter, Cognizant recorded an out-of-period correction of $1 million. To date, of the identified $6 million in potentially improper payments, Cognizant has now recorded a total of $4.1 million in corrections, she said.
"We have continued to aggressively implement remediation measures, including in compliance, the real estate function in India and procurement and accounts payable as they relate to real estate transactions in India," she added.
Following Cognizants shares tanking in the aftermath of the September disclosure, law firms in the US like Holzer & Holzer LLC and Glancy Prongay & Murray LLP had invited investors to join the class action lawsuit in case they had suffered losses.
The IT major reported a 15 percent rise in quarterly profit as businesses, especially financial firms, spent more on IT and consulting services.<br /><br />
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