Former President of Electronic Data Systems Corporation's Indian Subsidiary Settles SEC Injunctive Action Relating to Violations of the FCPA

09 October 2007 Publication

In September 2007, the SEC filed a settled civil action against Chandramowli Srinivasan, a former president of management consulting firm A.T. Kearney Ltd. - India (ATKI), in connection with improper payments made to senior employees of state owned enterprises in India. During the relevant time period, ATKI was a unit of A.T. Kearney, Inc., a subsidiary of Electronic Data Systems Corporation (EDS), a Delaware information technology company. According to the SEC, between 2001 and 2003, two Indian companies partly owned by the Indian government retained ATKI for management consulting services. Because of ATKI's performance problems, the Indian companies threatened to cancel the contract. Thereafter, the SEC alleged that Srinivasan and an ATKI contract accountant fabricated invoices to generate approximately $720,000 in improper payments made to employees of the companies in the form of cash transfers, gifts and services and improperly recorded on EDS's books and records. According to the SEC, the improper payments caused ATKI to retain the contracts and allowed ATKI to obtain two additional contracts. Based on the above conduct and without admitting or denying the SEC's allegation, Srinivasan agreed to entry of a final judgment ordering him to pay a $70,000 civil penalty. In a related matter, and based in part on the improper recording of the payments referenced above, EDS consented without admitting or denying the SEC's allegations, to an SEC order requiring it to pay approximately $490,000 in disgorgement and prejudgment interest and cease and desist from committing future FCPA violations. In resolving the matter, the SEC specifically noted that EDS discovered and reported the improper payments to the SEC.

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