india

Updated: Sep 17, 2019 14:49 IST

The opposition DMK has cornered the AIADMK government over allegations that a senior official of the Tamil Nadu government demanded and accepted a $2 million bribe from the US IT giant Cognizant Technology Solutions for permission to build a facility in Chennai.

An order of the American market regulator Securities and Exchange Commission (SEC) last week gave details about how the state government official took the bribe for giving planning permit for Cognizant’s massive KITS facility on Old Mahabalipuram Road.

SEC had found that at least three executives of the IT services and outsourcing company, including its former chief operating officer (COO) Sridhar Thiruvengadam, authorised the bribe payment. Thiruvengadam has agreed to pay a penalty of $50,000 to SEC to settle civil charges that he helped authorise and conceal a bribe paid to the official.

For the Dravida Munnetra Kazhagam, the issue has come in handy as yet another handle to beat the ruling party.

DMK president MK Stalin, also the leader of the Opposition in the state assembly, took to Facebook to vent his ire at the All India Anna Dravida Munnetra Kazhagam government over the bribery scandal.

“Leading US software giant CTS has paid penalty, admitting to having paid kickbacks to those in power for securing necessary permissions to construct a new facility in Chennai. This has made Tamil Nadu a laughing stock and a butt of ridicule even in the US,” he wrote in Tamil on Monday.

“While the US has punished those who gave the bribe, not even an FIR has been registered by the vigilance department in Tamil Nadu against those bureaucrats and politicians in power who have received illegal gratification!” he added.

The DMK chief also asked whether the Centre and Central Bureau of Investigation (CBI) were encouraging this by looking the other way.

The DMK has already said the recent three-nation tour of Chief Minister Edappadi K Palaniswami (EPS) to attract investments in the state was a wasteful expenditure.

The SEC order also gave details about how the offence was committed and details on those involved, including construction major L&T. The US regulator said Thiruvengadam has agreed to pay the fine to wriggle out of the proceedings in the bribery case involving Cognizant’s Chennai operations. It has, however, made mandatory for the former COO to cooperate with further investigations without causing any further violations and pay the penalty within 10 days.

Thiruvengadam has neither admitted to the crime nor denied it. But, this is a legally valid settlement allowed by the US. Thiruvengadam, who was appointed as COO in 2013, was placed under administrative leave in 2016 and he had resigned from the company last year.

The case pertains to payment of $2 million allegedly demanded by the state government official for granting planning permission for the facility. Had it been completed, the 2.7 million square feet KITS facility, aimed at accommodating 17,000 employees of Cognizant, would have been the company’s largest facility in India.

After the officials demanded the bribe, L&T had approached Cognizant to pay the amount and Thiruvengadam then called his bosses in the US. Former president Gordon Coburn and ex-legal officer Steven E Schwartz routed the amount to be paid to the government official. And according to the SEC order, Thiruvengadam facilitated the payment through false certifications.

A lawsuit filed by a group of investors had revealed the payment of the bribe and the role of Cognizant’s top brass in it. The company has ended up paying $25 million in penalties and $79 million for conducting internal investigations in the case.