by Staff Writers
Washington (AFP) Aug 2, 2012
Software and systems giant Oracle was fined $2 million Thursday to resolve charges that its India subsidiary kept a multi-million dollar off-books slush fund.
The Securities and Exchange Commission said it had filed charges in San Francisco District Court accusing Oracle of violating the US Foreign Corrupt Practices Act by not preventing the subsidiary from setting up the $2.2 million fund.
The money, which came out of the receipts from sales to Indian government agencies over 2005-2007, "was eventually used to make unauthorized payments to phony vendors in India", the SEC said in a statement.
The SEC did not allege that bribery had taken place, but suggested it was the possible purpose for payments to these ostensible vendors.
"In fact, none of these storefront-only third parties provided any services or were included on Oracle's approved vendor list," it said.
"The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement."
Oracle neither admitted nor denied the allegations, but the SEC said it voluntarily disclosed the problem, had cooperated with the investigation and had fired employees involved in the misconduct.
But the company was fined for poor internal controls and poor supervision of is India subsidiary.
"Through its subsidiary's use of secret cash cushions, Oracle exposed itself to the risk that these hidden funds would be put to illegal use," said SEC San Francisco official Marc Fagel.
"It is important for US companies to proactively establish policies and procedures to minimize the potential for payments to foreign officials or other unauthorized uses of company funds."
Global Trade News
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|