E.D.S. Untangles an Indian Mess

Electronic Data Systems Corp. will have to pay nearly $500,000 to settle federal securities regulators' charges, including one that the Texas company didn't properly account for huge bribes that a rogue subsidiary in India paid to keep business rolling in the door.

Chandramowli Srinivasan, the former president of E.D.S. subsidiary A.T. Kearney India Ltd., paid $720,000 to senior officials to hang onto management consulting contracts at two partially state-owned energy companies when the officials threatened to end them.

He fabricated invoices, which led to inaccuracies in E.D.S.'s books and records between early 2001 and September 2003, according to the complaint.

Srinivasan, 51, who did not admit or deny wrongdoing in the civil action filed in federal district court in Washington, D.C., agreed Tuesday to pay $70,000 to settle the matter.

In a separate proceeding, E.D.S. agreed to pay $490,902—which includes interest—to settle allegations of misconduct that included failing to disclose the cost of some derivatives contracts in 2002, failing to disclose its second quarter 2002 income had been boosted by a significant transaction, maintaining inaccurate books on a multibillion-dollar Intranet contract with the Navy and Marine Corps as well as not accounting in its books for the bribery scheme in India.

The S.E.C. did not break down how the money punishment was allotted, but E.D.S. did not admit or deny wrongdoing involving any of the misdeeds.

Even so, the commission won't be accepting the kind of payment Srinivason employed—cash, gifts and services—specifying in the agreement that the information technology company needs to pay up with a check (certified or bank cashier's) or a postal or bank money order.

by Elizabeth Olson

Add Your Comment

Report Abuse

Archive

Categories

Links