The firm created slush funds to bribe foreign officials in United Arab Emirates, Turkey, and India. In India, the SEC has charged Oracle India for violating FCPA rules for the second time.
In the Oracle case, an order was issued on 27 September 2022. According to the SEC’s order, Oracle India’s sales employees used “an excessive discount scheme” that pertained to a transaction with a transportation company, whose majority owner is the Ministry of Railways. The employees working on the deal cited competition from other OEMs and allegedly said the deal would be lost if a 70 percent discount was not provided on the software component of the deal.
“This request, since it was a steep discount, had to be approved by an employee in France, but no documentary support was given for this request to be approved. However, since the company it had provided the discount to is a state-owned enterprise, the procurement website “indicated that Oracle India faced no competition because it had mandated the use of Oracle products for the project”. It said the SEC.
SEC said, “One of the sales employees involved in the transaction maintained a spreadsheet that indicated US$67,000 was the ‘buffer’ available to potentially make payments to a specific Indian SOE official. A total of approximately US$330,000 was funnelled to an entity with a reputation for paying SOE officials and another US$62,000 was paid to an entity controlled by the sales employees responsible for the transaction.”
Indian SOE is a transportation company owned by the ministry of railways.
“Without admitting or denying the SEC’s findings, Oracle agreed to cease and desist from committing violations of the anti-bribery, books and records, and internal accounting controls provisions of the FCPA,” SEC said.
This is the second time Oracle has been fined. The previous instance also included the tech major’s India unit. In 2012 Oracle had resolved charges that pertained to creating a side fund of millions by the India unit. Of the $23 million, $8 million is in disgorgement, and the rest, $15 million, is the penalty.