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India's L&T denies links with US firm Cognizant's bribery charges

Bombay-listed contractor comments on claims that it made improper payments on behalf of the American tech firm

Larsen & Toubro is an Indian contracting giant.
© Pixabay
Larsen & Toubro is an Indian contracting giant.

Bombay Stock Exchange-listed contracting giant Larsen & Toubro has sought to distance itself from US technology firm Cognizant after the latter agreed a multimillion-dollar settlement with American authorities relating to a bribery case in India.

In a clarification to Mumbai bourse BSE, the engineering and construction giant said it was unware of evidence that supports claims of its improper payments to officials on behalf of Congnizant. These bribes were alleged to have been made to secure various permits at Cognizant’s campuses in Chennai and Pune.

The contractor said: “While we cannot comment on Cognizant’s decision to enter into these settlements, we are not aware of any evidence that supports our involvement in making the alleged improper payments. We confirm that neither we nor any of our employees are party to the proceedings brought in the US.”

The clarification came days after US regulator Securities and Exchange Commission (SEC) charged the New Jersey-headquartered tech firm and two former executives with violating the Foreign Corrupt Practices Act.

SEC’s complaint alleged that in 2014, a senior government official of the Indian state of Tamil Nadu demanded a $2m bribe from the construction firm responsible for building Cognizant’s 25ha campus in Chennai, India.

As alleged in the complaint, Cognizant’s president, Gordon Coburn, and chief legal officer, Steven E Schwartz, authorised the contractor to pay the bribe, and directed their subordinates to conceal the bribe by doctoring the contractor’s change orders.

No firm was named by SEC in its complaint, but it alleged that Cognizant authorised the construction firm to make two additional bribes worth more than $1.6m. Cognizant allegedly used sham change order requests to conceal the payments it made to reimburse the firm. However, Indian publication Mint reported earlier this week that L&T had facilitated the bribes. 

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Construction Week - Issue 745
Jun 30, 2019