Road Transport and Highways Minister Nitin Gadkari on Tuesday ordered an internal inquiry into the U.S. Department of Justice’s recent investigation which found that U.S.-based construction firm CDM Smith paid bribes worth around $1.18 million to the National Highways Authority of India during 2011-15 to bag contracts.

The U.S. Justice Department’s investigations found that CDM Smith, through its employees and agents, and those of its wholly owned subsidiary in India (CDM India) paid approximately $1.18 million in bribes to government officials in India.

The alleged bribe was paid “in exchange for highway construction supervision and design contracts and a water project contract resulting in approximately $4 million in net profits,” the Criminal Division of the Department of Justice said in a letter to CDM Smith dated June 21.

‘Code of Ethics’

“CDM Smith has a clear Code of Ethics and core values that drive our behaviour every day,” CDM Smith CEO Stephen J. Hickox said in a statement. “Any breach of these values or improper business activities is counter to our culture and will not be tolerated,” Mr. Hickox said.

The Department of Justice has closed the investigation after CDM Smith agreed to “disgorge” $4 million, which the company earned as profit due to the bribery, to the United States Treasury.

The employees of CDM Smith’s division responsible for India and CDM India paid bribes to NHAI officials in order to receive contracts from NHAI, according to the Department of Justice. “The bribes generally were 2-4% of the contract price and paid through fraudulent subcontractors, who provided no actual services and understood that payments were meant to solely benefit the officials,” it said.

Additionally, CDM Smith India paid $25,000 to local officials in Goa in relation to a water project contract. “All senior management at CDM India [who also acted as employees and agents of CDM Smith and signed contracts on behalf of CDM Smith, including CDM India’s country manager] were aware of the bribes for CDM Smith and CDM India contracts, and approved or participated in the misconduct,” it added.

Mr. Gadkari has taken a serious note of the allegations and asked the NHAI Chairman to hold an inquiry into the matter, a senior Ministry official said.

The NHAI said in a statement on Tuesday that CDM Smith was debarred for a period of three months from participating in future bidding of projects “because of deficiency in services in one of the projects.” It added that the U.S.-based firm has no ongoing assignment with the NHAI.

(With inputs from Press Trust of India)