Ministry of Railways starts investigation against Oracle on order of SEC | So Good News

The Ministry of Railways has begun investigating the bribery allegations against Oracle raised by the US Securities and Exchange Commission (SEC) order issued last month.

According to the SEC order, Oracle has been charged with bribing officials of an SOE under the administrative control of Indian Railways.

A railway ministry official said no timeline or state-owned enterprise (SOE) has been identified as the main target of this investigation so far.

Sources told ET that the ministry has also contacted Oracle and the SEC, asking them to disclose the name of the SOE and officials who accepted the bribe.

This allegation is the result of an SEC investigation that led to over $23 million in fines on allegations that Oracle violated the provisions of the Foreign Corrupt Practices Act (FCPA) as subsidiaries in India, Turkey and the United Arab Emirates (UAE).

According to the SEC order, “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”). In January 2019, sales staff working on the deal alleged that the deal would be lost without a 70% discount on the software component of the deal, citing intense competition from other OEMs.

The report said Oracle needed a France-based employee to approve the request because of 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.

One of the sales associates involved in the transaction maintained a spreadsheet indicating that $67,000 was the “buffer” available to potentially make payments to a specific Indian SOE official. A total of about $330,000 was transferred to an entity with a reputation for paying SOE officials, and another $62,000 was paid to one controlled by sales staff involved in the transaction.