September 8 (Reuters) – Cognizant Technology Solutions Corp (CTSH.O) reached a $ 95 million settlement to settle a lawsuit alleging the IT services company of fraudulent shareholders by hiding bribes to civil servants in India.
A preliminary settlement of the proposed class action lawsuit was filed in federal court in Newark, New Jersey, Tuesday, and requires a judge’s approval.
Shareholders accused Cognizant of failing to disclose payments in order to obtain permits to establish facilities in “special economic zones”, including its Indian headquarters in Chennai, where it could enjoy taxes and other benefits.
Cognizant’s stock price fell 13.3% on September 30, 2016 after the Teaneck, New Jersey-based company announced it was investigating allegations of bribery and checking for violations of federal corrupt practices abroad.
The defendants, including former President Gordon Coburn and former Chief Legal Officer Steven Schwartz, denied having consented to a settlement. Cognizant said it expected insurers to pay a large part of the settlement payment.
In February 2019, Cognizant agreed to pay $ 25 million to resolve a related civil case with the SEC.
US prosecutors earlier this month also accused Coburn and Schwartz of FCPA and other violations. These criminal proceedings remain pending.
Coburn and Schwartz lawyers did not immediately respond to requests for comment on Wednesday.
Reporting by Jonathan Stempel in New York Editing by Mark Potter
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