Oracle India looks to be in the middle of yet another bribery issue, and multiple sources told TOI that Sandeep Mathur's sudden exit as managing director of the company is linked to this.Mathur quit soon after returning from an Oracle conference in San Francisco earlier this month. Shailender Kumar, group VP of key accounts for Oracle India, has taken over as interim MD.
This is the second such episode for Oracle in India. Two years ago, the US Securities and Exchange Commission (SEC) had filed a complaint against Oracle alleging that the company's Indian subsidiary had possibly indulged in bribery or embezzlement. Oracle agreed to pay a $2 million penalty to settle the SEC's charges.
The latest concerns have allegedly been triggered by compliance issues arising from a database contract that Oracle had won from the Andhra Pradesh police department a few years back. TOI has learnt that the issue came to light when an anonymous whistleblower wrote an email to Oracle alleging that one of its channel partners violated its contract norms to win the contract. Sources said that action may be taken against several Oracle India officials.
TOI sent a mail to Oracle detailing the charges being made, but the company said it would not comment on the matter.
Mathur was responsible for multiple lines of business: technology, applications, systems and Fusion Middleware as well as driving growth across public sector and key accounts. Prior to his role as MD, he was VP of technology at Oracle India. Mathur joined Oracle in 2003 as director of Oracle Direct, North America sales.
In the previous SEC investigation, it was found that Oracle India secretly parked with distributors a portion of the proceeds from certain sales to the Indian government and put the money to unauthorized use, creating the potential for bribery or embezzlement. Oracle India's distributors allegedly held approximately $2.2 million of the proceeds in unauthorized side funds.
The SEC alleged that Oracle India employees would then direct its distributors to disburse payments out of the unauthorized side funds to purported local "vendors." "Several of the 'vendors' were merely storefronts that did not provide any services. Oracle failed to accurately record these side funds on the company's books and records, and failed to implement or maintain a system of effective internal accounting controls to prevent improper side funds in violation of the FCPA, which requires public companies to keep books and records that accurately reflect their operations," SEC said.
Several MNCs operating in India have over the years been investigated for violation of the Foreign Corrupt Practices Act (FCPA) of the US that bars bribing officials of foreign governments. Following such an investigation of Walmart in Mexico, the retailer initiated an investigation in 2012 into allegations of bribery in its India unit. Several executives in the India unit were suspended and some quit.
TOI sent a mail to Oracle detailing the charges being made, but the company said it would not comment on the matter.
Mathur was responsible for multiple lines of business: technology, applications, systems and Fusion Middleware as well as driving growth across public sector and key accounts. Prior to his role as MD, he was VP of technology at Oracle India. Mathur joined Oracle in 2003 as director of Oracle Direct, North America sales.
In the previous SEC investigation, it was found that Oracle India secretly parked with distributors a portion of the proceeds from certain sales to the Indian government and put the money to unauthorized use, creating the potential for bribery or embezzlement. Oracle India's distributors allegedly held approximately $2.2 million of the proceeds in unauthorized side funds.
The SEC alleged that Oracle India employees would then direct its distributors to disburse payments out of the unauthorized side funds to purported local "vendors." "Several of the 'vendors' were merely storefronts that did not provide any services. Oracle failed to accurately record these side funds on the company's books and records, and failed to implement or maintain a system of effective internal accounting controls to prevent improper side funds in violation of the FCPA, which requires public companies to keep books and records that accurately reflect their operations," SEC said.
Several MNCs operating in India have over the years been investigated for violation of the Foreign Corrupt Practices Act (FCPA) of the US that bars bribing officials of foreign governments. Following such an investigation of Walmart in Mexico, the retailer initiated an investigation in 2012 into allegations of bribery in its India unit. Several executives in the India unit were suspended and some quit.
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