- Last month Cognizant said it has identified 'improper payments'
- In September last year, the firm started conducting an investigation
- The investigation is conducted under the oversight of the Audit Committee
IT major Cognizant said that last year it incurred $27 million in costs related to investigation into "improper payments" in India and related lawsuits. Cognizant also said that it expects to continue to incur expenses related to these matters in 2017. "In 2016, we incurred $27 million in costs related to the FCPA (Foreign Corrupt Practices Act) investigation and related lawsuits. We expect to continue to incur expenses related to these matters in 2017 and future periods," Cognizant said in its latest annual report.
In September last year, US-based 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". Last month Cognizant said it has identified "potentially improper payments" worth $6 million being made for company-owned facilities in India.
"The investigation has progressed significantly. We have identified a total of approximately $6 million in potentially improper payments relating to Company-owned facilities in India, an increase of $1 million from what we reported at the end of the third quarter," Cognizant CFO Karen McLoughlin had said on a concall.
Cognizant said that "based on the results of the investigation to date, the members of senior management who may have participated in or been aware of the making of the identified potentially improper payments and failed to take action to prevent the making of the identified potentially improper payments are no longer with the company or in a senior management position." (With inputs from agencies)