IT services provider Cognizant Technology Solutions Corp has entered into an agreement to settle a legal case for $95 million or around Rs 700 crore in order to put to rest an alleged bribery case in India wherein two of the company's former executives are implicated.
The lawsuit, filed by investors in the United States, accused Cognizant of defrauding shareholders by hiding bribes to its officials in India.
A preliminary settlement of the proposed class action was filed on September 7 with the federal court in New Jersey, Newark, and entails a judge's approval.
Cognizant was accused by shareholders of failing to disclose payments made to obtain permits for facilities in "special economic zones," including in Chennai, where it could enjoy tax and other benefits.
The IT service provider's share price fell 13.3% on Sept. 30, 2016, after the Teaneck, New Jersey-based company said it was looking into bribery allegations and whether there were violations of the federal Foreign Corrupt Practices Act.
The defendants, including former president Gordon Coburn and former chief legal officer Steven Schwartz, denied wrongdoing in agreeing to settle. Cognizant said it expected insurers to cover a substantial majority of the settlement payment.
In February 2019, Cognizant agreed to pay $25 million to settle a related US Securities and Exchange Commission civil probe.
US prosecutors also charged Coburn and Schwartz that month with FCPA and other violations. Those criminal cases remain pending.
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