Companies & Sectors
Oracle agrees to pay $2 million to settle allegations in India

Oracle India sold software licenses and services to India’s government through local distributors, and then had the distributors ‘park’ excess funds, worth about $2.2 million from the sales outside Oracle India’s books and records, the SEC alleged in its charge-sheet

Washington: Computer software and services company Oracle has agreed to pay $2 million penalty to settle charges of US market regulator Securities and Exchange Commission (SEC) that its Indian subsidiary failed to prevent secret payments in its business transaction with the government between 2005 and 2007, reports PTI.


Oracle India structured transactions with the Indian government on more than a dozen occasions in a way that enabled Oracle India’s distributors to hold about $2.2 million of the proceeds in unauthorised side funds, the SEC alleged in its charge-sheet against Oracle.


According to the SEC’s complaint filed in the US District Court for the Northern District of California, the misconduct at Oracle’s India subsidiary—Oracle India Pvt Ltd—occurred between 2005 and 2007.


Oracle India sold software licenses and services to the Indian government through local distributors, and then had the distributors ‘park’ excess funds from the sales outside Oracle India’s books and records.


The charge-sheet, however, makes no reference to whom these payments were made in India, either private individuals or officials, except for refereeing to a particular $3 million deal with the Union ministry of information and communication in May 2006.


Of the $3.9 million, Oracle India sent only $2.1 million to Oracle to record as revenue on the transaction.


“As instructed by Oracle India’s then-sales director, only $2.1 million was sent to Oracle to record as revenue on the transaction, and the distributor kept $151,000 for services rendered. Certain other Oracle India employees further instructed the distributor to park the remaining $1.7 million for “marketing development purposes,” the complaint said.


SEC alleged, “Two months later, one of those same Oracle India employees created and provided to the distributor eight invoices for payments to purported third-party vendors ranging from $110,000 to $396,000.”


“In fact, none of these storefront-only third parties provided any services or were included on Oracle’s approved vendor list. The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement,” it added.


Without admitting or denying the SEC’s allegations, Oracle consented to the entry of a final judgment ordering the company to pay the $2 million penalty and permanently enjoining it from future violations of these provisions, the official statement said.


The settlement takes into account Oracle’s voluntary disclosure of the conduct in India and its cooperation with the SEC’s investigation, as well as remedial measures taken by the company, including firing the employees involved in the misconduct and making significant enhancements to its Foreign Corrupt Practices Act (FCPA) compliance program, it added.


“At the time, Oracle India’s typical business model involved selling Oracle software licenses and services through local distributors who had written agreements with Oracle India.


“In the transactions at issue, Oracle India was heavily involved in identifying and working with the end-user customers in selling products and services to them and negotiating the final price,” it said.


The purchase order, however, was placed by the customer with Oracle India’s distributor.


The distributor bought the licenses and services directly from Oracle, and then resold them to the customer at the higher price that had been negotiated by Oracle India.


“The difference between what the government end-user paid the distributor and what the distributor paid Oracle typically is referred to as ‘margin’, which the distributor generally retains as payment for its services,” the SEC alleged.


“On around 14 occasions related to eight different government contracts between 2005 and 2007, certain Oracle India employees created extra margins between the end-user and distributor price and directed the distributors to hold the extra margin in side funds.


“Oracle India’s employees made these margins large enough to ensure a side fund existed to pay third parties,” it said.


“At the direction of the Oracle India employees, the distributor then made payments out of the side funds to third parties, purportedly for marketing and development expenses. Some of the recipients of these payments were not on Oracle’s approved local vendor list; indeed, some of the third parties did not exist and were merely storefronts,” SEC alleged.


Meanwhile in an emailed statement Oracle said, in 2007, the company discovered that a few employees of its Indian subsidiary apparently had directed distributors to maintain side funds in violation of Oracle business practices.


Following a thorough investigation, the employees involved were terminated, it added.


Oracle disclosed the matter to the government and has cooperated with the SEC in its investigation, culminating in the announcement of a $2 million settlement, it added.


“Oracle has established policies, programmes and controls to deter and detect inappropriate conduct that have been recognised among the best in our industry,” Oracle spokesperson Deborah Hellinger said.


“We will continue to maintain a high standard of compliance and accountability for our business around the world,” she added.


Geetika case: Former Haryana Minister Gopal Kanda surrenders

In her suicide note, Geetika had alleged that Kanda and Chaddha were harassing her to rejoin MDLR Airlines, the former minister's firm, after she left the job

New Delhi: After being on the run for 10 days, controversial former minister from Haryana, Gopal Kanda surrendered before police in the wee hours on Saturday and was arrested in connection with the suicide of his former employee Geetika Sharma, reports PTI.
Kanda, who was absconding for the past 10 days after police served him a notice to appear before them to join investigations, surfaced at Bharat Nagar Police Station at 4am.
Before entering the police station, he told reporters that he was joining investigations as directed by the Delhi Police. 
"Kanda has surrendered and we have arrested him," P Karunakaran, Deputy Commissioner of Police (North-West) told PTI.
Delhi Police had conducted over 60 searches and raids in Haryana, Goa and Siliguri in West Bengal, besides questioning around 30 people in connection with the case. His brother Govind Kanda was also arrested yesterday for allegedly helping Kanda evade police.
Kanda's employee, Aruna Chaddha, a senior functionary with now defunct MDLR airlines, has already been arrested and is in judicial custody in connection with the suicide of 23-year-old air hostess Geetika Sharma, who allegedly took her life on 5th August at her Ashok Vihar residence.
In her suicide note, Geetika had alleged that Kanda and Chaddha were harassing her to rejoin the former minister's firm after she left the job.
Reacting to Kanda's surrender, Geetika's brother Ankit said, "This is a planned and well thought out entry. Now my only fear is that the investigations will be impartial of not. Twelve days is enough to destroy evidence. Whatever power Kanda could have used to tamper with evidence he has. The investigation should be transparent." 
"I want his interrogation to be done before camera and a retired judge so that he does not change his statement," he said. 
Ankit said Geetika's Facebook account has been deactivated and alleged that Kanda was behind it.
"I have informed the DCP about it. I don't know who or how it was done. Kanda is behind it," he said.
He also alleged that the Haryana Government is supporting Kanda.
The anticipatory bail plea of Kanda was dismissed by the Delhi High Court yesterday which said that despite being a "free man" he himself did not file it and it was a "sufficient" ground for its rejection.
The court also came down heavily on Delhi Police for not pressing its plea before the magisterial court to search his premises in Haryana.
Without going into the legal and factual contentions raised by Kanda's lawyer in the day-long hearing, Justice PK Bhasin had said, "In my view, this anticipatory bail application is liable to be rejected, without going into the merits at all, only on the ground that the same has not been filed by the person apprehending his arrest." 
The Rohini Court on Thursday had issued a non bailable warrant (NBW) against Kanda.
Kanda, who was last seen coming out of his Gurgaon residence on 8th August, was served with a notice to join investigations on 7th August.


Peace eludes Pune post abortive bomb blasts; NE people attacked

Two of the 13 people arrested by police reportedly confessed that the MMS and SMS that depicted violent incidents in Myanmar and Assam turned them vengeful

Pune: The spectacle of fear-stricken residents from North East swarming Pune railway station in a desperate bid to head for their home states, has had a benumbing effect on the second capital of Maharashtra which is still coming to terms with what could have been a potentially catastrophic serial bomb explosions a few days back, reports PTI.
Despite stepped up efforts by authorities, social organisations and help groups to remove the fear stalking hundreds of students and workers from Assam and Manipur, rattled by beastly attacks in the last four days in Kondhwa, Hadapsar and Cantonment areas of the city, they continued to make a beeline towards the railway station.
Their only goal for the time being appeared to catch "Azad Hind Express" that leaves the city every evening for Howrah.
"We are returning as our parents are worried. I will come back but as of now I am leaving with nine of my friends from Imphal," said a female student at the railway station.
Police believe that doctored MMS and SMS were the main provocation behind the attacks since 12th August in which about 15 NE residents in certain localities were targeted. Two of the 13 persons arrested by police reportedly confessed that the MMS and SMS that depicted violent incidents in Myanmar and Assam turned them vengeful, sources said.
After approaching Facebook, YouTube and Google to remove some "objectionable links" and five videos in respect of the Assam violence, city police have now filed a complaint against "unknown persons" under the IT act, accusing them of exploiting the social networking sites to spread offensive false and intimidating messages.
According to City Police Commissioner Gulabrao Pol, who has circulated a message in the city guaranteeing safety of NE people asking them not to heed rumours, the situation had been totally under control after police swung into action to book the culprit. 
Pol, however, admitted that police had not been able to stop the people from leaving the city mainly due to the fear factor stemming from unfounded rumours and threats of a backlash.
Over 4,000 NE residents who, in addition to students comprise workers hired by security agencies and construction firms as well as those employed with Chinese food joints, have so far reportedly left the city in the last few days, with railway authorities arranging for extra bogies to accommodate a continuously swelling number of passengers.
At a meeting held in the city on Friday, representatives of various organisations from the city as well as local corporators and MLAs exhorted the NE population here to stay put and ignore rumours as the situation did not warrant an exodus triggered by pressing of the panic button.
Rozin Singh, an MLA from Mizoram who was one of the invitees at the meeting, also addressed by top police officers and district collector, said, "I appeal to all NE people in Pune not to leave the city as the situation is normal. Police have taken proper security measures to infuse confidence among people. There have been no fresh attacks in the city."
In addition to police helpline, some social organisations have floated their own helpline giving the numbers to the affected NE residents and providing them with food and medicine during their journey back home after failing to dissuade them from leaving the city.
A 24-hour-vigil is being maintained by police and para-military forces in Kondhwa and Cantonment localities of the city to prevent any untoward incident.


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