The US Securities and Exchange Commission (SEC) on September 27  fined tech giant Oracle  $23 million for violating the Foreign Corrupt Practices Act (FCPA) in 2019 for creating slush funds for bribing officials in India, Turkey and the UAE.

This is the second time Oracle has been accused of engaging in corrupt practices in India. In 2012, the SEC had fined Oracle for corrupt practices in India in relation to the contracts with the Ministry of Information Technology in 2006-2008.

As per the 10-page order by SEC, $3,92,000 (`2.8 crore) was the slush fund created by Oracle India to bribe an Indian Railway-owned transport firm in 2019. Detailing the company’s India operations, the SEC said Oracle India’s employees used “an excessive discount scheme” in connection with a transaction in 2019 with a transportation company owned by the Ministry of Railways.

However, the order by SEC did not specify the name of the transport company that had been bribed.

Page six of the SEC’s order details Oracle’s operations in India with a headline ‘Improper Conduct at Oracle India’. 

It said that in 2019, Oracle India sales employees also used an excessive discount scheme in connection with a transaction with a transportation company, a majority of which was owned by the Indian Ministry of Railways (Indian SOE).

 “In January 2019, the sales employees working on the deal, citing intense competition from other original equipment manufacturers, claimed the deal would be lost without a 70 per cent discount on the software component of the deal. Due to the size of the discount, Oracle required an employee based in France to approve the request,” the  SEC order said.

“The Oracle designee provided approval for the discount without requiring the sales employee to provide further documentary support for the request. In fact, the Indian SOE’s publicly available procurement website indicated that Oracle India faced no competition because it had mandated the use of Oracle products for the project,” said the order.

“One of the sales employees involved in the transaction maintained a spreadsheet that indicated $67,000 was the “buffer” available to potentially make payments to a specific Indian SOE official. A total of approximately $330,000 was funneled to an entity with a reputation for paying SOE officials and another $62,000 was paid to an entity controlled by the sales employees responsible for the transaction,” said the SEC order on the bribery in India by Oracle.  The SEC order requires Oracle Corporation to pay more than $23 million to resolve charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA) when “subsidiaries in Turkey, the United Arab Emirates (UAE), and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019,” the SEC said in a statement on Tuesday evening.