US tech giant Cognizant Technology Solutions Corp. will internally investigate payments relating to facilities in India were made in violation of American law.
In an announcement on Friday, the company said its president Gordon Coburn had resigned and it would launch an internal investigation on payments relating to facilities in India.
News of this assurance, given to the US Justice department and US Securities and Exchange Commission resulted in the drop of share prices by 5.8%, reported Wall Street Journal.
“The company is conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act and other applicable laws,” the statement read.
Livemint reported Cognizant saying that it was cooperating with US authorities on the matter.
Replacing Coburn will be Indian-born Rajeev Mehta. "I am honored to assume this new role at an exciting time in Cognizant's history," said Mehta.
"Over the past year, we have designed and introduced a new operating model to support our strategic vision and growth. I look forward to working with our clients, our associates, and our business partners to take the company to the next level," Mehta added.
“The investigation is being conducted under the oversight of the Audit Committee, with the assistance of outside counsel, and is currently focused on a small number of company-owned facilities,” the company statement added.
“The company has voluntarily notified the United States Department of Justice (the “DOJ”) and United States Securities and Exchange Commission (the “SEC”) and is cooperating fully with both agencies. The internal investigation is in its early stages, and the company is not able to predict what, if any, action may be taken by the DOJ, SEC or any governmental authority in connection with the investigation or the effect of the matter on the Company’s results of operations, cash flows or financial position” the statement added.