“Cognizant paid $25 million fine and blamed somebody; Department of Justice (US) lets them go. Now how am I to defend myself? Is there a letter to me accusing me of these things?” SN Subrahmanyan, chief executive officer and managing director, told ET.
The New Jersey based Cognizant, which follows the offshore model of Indian IT services firms, had allegedly leaned on a construction company, which was not named, to pay bribe to Tamil Nadu government officials to secure building permits for its campus on Chennai outskirts, a US court had said in February.
The construction firm, which Cognizant declined to name, had hired a third-party consultant to pay an around $2 million bribe to government officials in Tamil Nadu, the US District Court for the District of New Jersey said in the indictment order, which indicted two senior American executives of the software firm for authorizing payment of bribes in India. L&T was the construction agency for these campuses.
L&T’s audit committee has hired an external expert to probe the bribery allegations. The $ 18-billion engineering major earlier made regulatory disclosures saying that the audit committee of the management had conducted investigation by leading law firms in the US and India, with the help of forensic experts from Hong Kong in 2017. This investigation did not reveal any evidence of the involvement of the company or any of its executives.
“Our name is not mentioned anywhere. Cognizant has gone and paid a fine and blamed somebody, and we are expected to take the blame?," Subrahmanyan said. "Here is a multinational company doing wrong things in India and blaming an Indian company, and we are made to look like Ravana (the king of Lanka in Ramayana)”.
Cognizant declined comment.
L&T, which is embroiled in a takeover war with Mindtree, has dismissed corporate governance questions raised by the founders of Mindtree, citing its 80 years' old well-storyed track record and its leadership that includes AM Naik, who was recently awarded Padma Vibhushan. The company’s management denied this was a topic of discussion when they interacted with Mindtree founders.
Experts say shareholders are not concerned about small time corruption and only raise voices when it hurts the company.
"Shareholders care if it (the corruption) is on a very large scale and if it is debilitating to the company. It may not be the right thing to do, but if it is a minuscule part of the company's business and its doesn't hurt the company or others then shareholders may have to live with it," Shriram Subramaniam, founder of InGovern Research Services.
Subrahmanyan of L&T said they are being accused of something that is not yet proved but the MNC which has confesses of malpractices has not been investigated by Indian authorities.
“The problem with MNCs is that some of them come and play with Indians and they get away scot-free. Time and again it has happened,” he said.