Ministry of Railways starts investigation against Oracle following SEC order charging the firm with bribing officials

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New Delhi: The US Securities and Exchange Commission (SEC) last month issued an order charging US technology company Oracle with bribing officials of a state-owned enterprise (SOE) under the administrative control of Indian Railways. Now Railways has started its investigation against the company.

“Regarding the SEC order in the Oracle case, Indian Railway has taken cognizance and initiated an investigation,” the railway ministry said.

No timeline or SOE has been identified as the main target of this investigation so far, according to a Railway Ministry official quoted by the Economic Times. The ministry has also approached Oracle and the SEC, asking them to share the names of SOEs and officials who accepted bribes.

The charges against the technology firm are the result of an SEC investigation that led to fines of more than $23 million over allegations that Oracle violated provisions of the Foreign Corrupt Practices Act (FCPA) as subsidiaries in India, Turkey and the United Arab Emirates (UAE). ).

SEC order against Oracle

In an order dated September 27, the US regulator said Oracle India’s employees used “an excessive rebate scheme” in connection with a transaction with a transport company owned by the railway ministry in 2019.

“Oracle India sales staff used an excessive discount scheme in connection with a transaction with a transportation company, majority owned by the Indian Ministry of Railways (“Indian SOE”), the SEC order said.

In January 2019, sales staff working on the deal claimed the deal would be lost without a 70 percent discount on the software component of the deal, citing intense competition from other OEMs, it added.

The company needed a France-based employee to approve the request due to the size of the discount. The employee approved the discount without requesting additional documentary support. The Indian SOE’s publicly available procurement website indicated that Oracle India had no competition as it had mandated the use of Oracle products for the project, the report further added.

According to a spreadsheet maintained by a sales associate involved in the transaction, $67,000 was the “buffer” available to potentially pay a specific Indian SOE official. “A total of approximately $330,000 was transferred to an entity with a reputation for paying SOE officials, and an additional $62,000 paid to an entity controlled by sales employees responsible for the transaction,” part of the SEC order said.

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