L&T to seek expert opinion to review Cognizant bribery case probe

Engineering major Larsen & Toubro (L&T) on Friday said it will seek the assistance of an external expert to review the bribery charges relating to the construction of Cognizant’s Chennai campus.

In an announcement to NSE on Friday, L&T said that during the Audit Committee meeting held on 27th February 2019, the "management presented all details of the company's construction contracts with CTS, including particulars of development relating to the recent settlement between CTS and SEC and the ongoing proceedings before Department of Justice, USA (DOJ) In this connection, the company also briefed the Audit Committee of the management-initiated investigation conducted by leading law firms in USA and India with the help of forensic experts from Hong Kong in 2017."

Cognizant recently paid around $28 million to the US Department of Justice to settle the charges that it violated the FCPA when two of its former executives were authorised to bribe government officials in India to expedite approvals for real-estate facilities.

It was alleged that the $3.6 million was paid through engineering major L&T. However, L&T denied the allegation and said that the company was not aware of any evidence that supported the company's involvement in making the alleged improper payments.

"While noting that there was no evidence of the involvement of the Company or any of its executives as alleged based on information provided, the Audit Committee decided to seek assistance of an external expert to review the details of investigations conducted on behalf of the Company in 2017, based on which it will decide the future course of action", said L&T.

The SEC order stated that from 2014 to 2016 some Cognizant’s executives had authorised contractors to bribe, on the company's behalf, government officials in India to obtain permits and licences for constructing and operating office buildings.

In 2014, $2 million was authorised to be paid to a senior government official for issuing a planning permit for a campus of 2.7 million square feet in Chennai. Payment, along with a scheme to conceal a $2.5 million reimbursement, was authorised to the contractor. The same contractor was authorised to pay $770,000 to a government official for environmental clearance for a project in Pune and another $870,000 for construction-related permits in Siruseri, Chennai. The company invested Rs 1,500-2,000 crore in these projects.