Cognizant Reaches $ 95 Million Settlement With U.S. Shareholders Over Bribery Allegations In India

Cognizant Technology Solutions Corp has reached a US $ 95 million settlement to resolve a lawsuit accusing the computer services company of defrauding shareholders by concealing bribes from officials in India.

A preliminary settlement of the proposed class action lawsuit was filed Tuesday in federal court in Newark, New Jersey, and requires a judge’s approval.

Shareholders accused Cognizant of not disclosing payments made to obtain permits for facilities in “special economic zones”, including its Indian headquarters in Chennai, where it could receive tax and other benefits.

Cognizant’s share price fell 13.3% on September 30, 2016, after the Teaneck, New Jersey-based company said it was investigating allegations of corruption and whether there was had violations of federal law on corrupt practices abroad.

The defendants, including former President Gordon Coburn and former chief legal counsel Steven Schwartz, have denied any wrongdoing in agreeing to settle. Cognizant said he expected insurers to cover a substantial majority of the settlement payment.

In February 2019, Cognizant agreed to pay US $ 25 million to settle a related civil investigation by the United States Securities and Exchange Commission.

U.S. prosecutors also charged Coburn and Schwartz that month with FCPA and other violations. These criminal cases remain pending.

Lawyers for Coburn and Schwartz did not immediately respond to requests for comment on Wednesday.

(Reporting by Jonathan Stempel in New York; editing by Mark Potter)