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India’s CBI Files Charge Sheet Against Air India, SAP And IBM Executives

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Today’s post is from Sherbir Panag and Ishita Parashar who are both members of the Law Offices of Panag & Babu – India’s largest white collar crimes law firm.

On 4 February 2024, the Central Bureau of Investigation (CBI) – India’s premiere investigation body, filed a charge sheet against the former chairman and managing director of Air India, along with executives from SAP and IBM’s Indian subsidiaries. A charge sheet is the formal conclusion of an investigation, and marks the commencement of a trial. To be clear the charge sheet is reflective of the investigative body’s conclusion on the charges and is not the formal charges that are framed by a court, to which the accused responds.

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Chemical Company Albemarle Resolves A Net $218.4 Million Enforcement Action

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As highlighted in this prior post, in February 2018 Albemarle Corp. (a North Carolina based chemical company) disclosed Foreign Corrupt Practices Act scrutiny.

More than 5.5 years later, the DOJ and SEC announced a net $218.4 million FCPA enforcement action against the company.

The resolution included a DOJ non-prosecution agreement (pursuant to which the company agreed to pay a $98.2 million criminal penalty and $16.6 million in forfeiture) and an SEC administrative order (pursuant to which the company agreed to pay approximately $103.6 million in disgorgement and prejudgment interest).

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Oracle Becomes The 20th Corporate FCPA Repeat Offender

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As highlighted in this prior post, in 2012 Oracle resolved a $2 million SEC Foreign Corrupt Practices Act enforcement action finding that “Oracle violated the books and records and internal accounting controls provisions of the FCPA by failing to prevent Oracle India Private Limited from keeping unauthorized side funds at distributors from 2005 to 2007.”

As a condition of settlement, Oracle consented to the entry of a final judgment, among other things, “permanently enjoining it from future violations” of the books and records and internal controls provisions and in resolving the matter the SEC noted the “significant enhancements” Oracle made to its FCPA compliance program.

Yesterday, the SEC announced a $22.9 million FCPA enforcement action against Oracle “to resolve charges that it violated provisions of the FCPA when subsidiaries in Turkey, the United Arab Emirates, and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.”

In resolving a second FCPA enforcement action, Oracle becomes the 20th corporate FCPA repeat offender (see here for the list).

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Bad Advertising – Ad Group WPP Resolves $19.2 Million FCPA Enforcement Action

WPP

Last Friday, the SEC announced that London-based WPP (the world’s largest advertising agency and a company with depositary shares traded on the New York Stock Exchange) agreed to resolve a $19.2 million Foreign Corrupt Practices Act enforcement action.

The enforcement action focused on WPP subsidiary conduct in India, China, Brazil and Peru.

In summary fashion, the SEC’s order finds:

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Scrutiny Of Indian Issuer Grows

dr.reddy's

There have been several Foreign Corrupt Practices Act enforcement actions regarding conduct in India (see here for some of the actions). Certain of those enforcement actions involved the conduct of Indian subsidiaries of U.S. issuers.

However, it is believed that there has never been an FCPA enforcement action against an Indian issuer.

That may change.

As highlighted in this prior post, in November 2020 Dr. Reddy’s Laboratories Ltd., (an India-based pharmaceutical company with ADRs listed on the New York Stock Exchange) disclosed that it “has commenced a detailed investigation into an anonymous complaint” alleging that “healthcare professionals in Ukraine and potentially in other countries were provided with improper benefits in violation of U.S. laws.”

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