Oracle pays off SEC to settle Indian channel bribery claims
Offers $2m for two years of dodgy dealings
The Securities and Exchange Commission (SEC) has agreed to settle an outstanding action over inducements paid by Oracle India to secure government contracts.
The SEC filing notes that between 2005 and 2007 Oracle India siphoned off around $2.2m from eight different contracts with the Indian government that were worth $6.7m in revenues. This money was held off the corporate books for "market development purposes" and paid off via a series of front companies.
In one documented scam from May 2006 Oracle India negotiated a a $3.9m deal with India's Ministry of Information Technology and Communications. Only $2.1m made its way into Oracle's accounts, with the reseller keeping $151,000 and putting the remaining $1.7m into a hidden slush fund.
Two months later the money was paid out in amounts ranging from $110,000 to $396,000 to invoices from companies, none of which are on Oracle's approved vendor list. Many were found to be simple storefront organizations set up simply to process and forward the funds.
In November 2007, Oracle India's senior channel sales manager resigned after an inquiry into local Indian tax irregularities. In the ensuing investigation, four other employees were found to have broken the rules regarding the slush fund payments. They were fired from the company and Oracle says it has tightened up its rules on compliance.
"Oracle has agreed to settle the SEC's charges without admitting or denying the allegations," the SEC said in a statement. "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."
This isn't the first time Oracle's been in trouble for this kind of behavior, albeit sometimes not directly. The company agreed to pay $46m last year to settle bribery issues incurred by Sun before the Ellison takeover. ®
Sponsored: DevOps and continuous delivery