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What the SEC and DOJ Records Say About Cognizant, L&T and India Campus Permits

The SEC found Cognizant authorized and reimbursed payments for Indian permits, but its order did not name L&T. Here is what the agency, DOJ, L&T and Mint reported.
From TheFinanceBase Team3 min to read
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Mint reported in 2019 that Larsen & Toubro (L&T) facilitated bribes to Indian officials on Cognizant’s behalf to secure campus clearances. The SEC’s 2019 enforcement order found that Cognizant authorized and reimbursed contractor payments to officials, but it referred to the contractor only as “Contracting Firm-1”; it did not name L&T. L&T said it was not aware of evidence supporting its involvement. Those distinctions matter: the SEC resolved charges against Cognizant, while separate criminal charges against two former Cognizant executives were allegations, not findings of guilt.

What did the SEC find?

In a February 2019 order, the U.S. Securities and Exchange Commission said Cognizant, acting through U.S. and Indian executives, authorized contractors to pay and reimbursed them for approximately $3.6 million in bribes to Indian officials between 2014 and 2016. The payments were for construction-related permits and operating licenses. The order described the contractor as “Contracting Firm-1,” not by name.

The SEC order identified approximately $16,394,351 in ill-gotten gains. Its account of the payments included three campus-related episodes and approximately $27,000 in bribes for operating licenses at six facilities.

Which campuses and permits were involved?

Location Permit or clearance Amount in SEC order Timing and accounting described by SEC
Chennai, KITS campus Planning permit Approximately $2 million bribe; Cognizant authorized a $2.5 million reimbursement, including a $500,000 commission Construction on the 2.7-million-square-foot campus began in 2011 before the required permit. An official demanded the payment in 2014; the permit issued in November 2014. Reimbursements were paid in installments from March 2015 to January 2016 through falsified change orders.
Pune Environmental clearance $770,000 The order says Cognizant India authorized the bribe in early 2013. An initial reimbursement request described “Liasoning [sic] and consultations charge towards Environmental clearance”; after it was rejected, a revised workstation-related description was approved.
Siruseri Planning, power and environmental clearances $840,000 The order says payments were made around 2012 and reimbursements in installments between 2015 and 2016.
Six facilities Operating licenses, including kitchen operations, air and water consents, and fire protection Approximately $27,000 The order places the payments between 2013 and early 2016.

Mint reported $870,000 for the Siruseri episode, while the SEC order states $840,000. The figures come from different accounts; the official SEC order’s amount is the one shown in the table.

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What did Cognizant settle, and what did it admit?

The SEC announced on February 15, 2019, that Cognizant agreed to pay $25 million to settle charges. The SEC described the total as approximately $19 million in disgorgement and prejudgment interest, plus a $6 million penalty. Its order states that Cognizant violated the Foreign Corrupt Practices Act’s anti-bribery, books-and-records, and internal accounting-controls provisions.

Cognizant consented to the SEC order without admitting or denying its findings, except as to the SEC’s jurisdiction. This was a civil SEC resolution, not a criminal conviction of the company.

What did L&T say about the allegation?

Mint’s report attributed its description of L&T’s role to an unnamed person familiar with the development. The SEC order itself anonymized the contractor. In a February 18, 2019 filing, L&T acknowledged Cognizant’s DOJ and SEC resolutions and stated: “we are not aware of any evidence that supports our involvement in making the alleged improper payments.” The filing also said neither L&T nor its employees were parties to the U.S. proceedings. These sources do not establish that L&T admitted wrongdoing.

Mint reported that it could not ascertain the names of the government officials and that an email seeking comment from L&T went unanswered at the time of publication. The officials’ identities should not be treated as established by these accounts.

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Were Cognizant executives criminally charged?

Separately from the SEC’s corporate case, the U.S. Department of Justice announced in February 2019 that former Cognizant president Gordon Coburn and former chief legal officer Steven Schwartz had been indicted on criminal charges. The DOJ emphasized: “The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.” Mint reported that the two denied wrongdoing through their lawyers.

The DOJ also said it declined prosecution of Cognizant after considering the company’s voluntary self-disclosure, cooperation, remediation, and disgorgement. The DOJ announcement establishes the indictment at that time; the sources cited here do not establish the later final disposition of the individuals’ cases.

Primary records and reporting

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