The U.S. government has requested testimony from Larsen and Toubro Ltd. Chairman S.N. Subrahmanyan to determine whether Cognizant Technology Solutions Corp. routed illicit payments through India’s largest construction company to government officials between 2013 and 2015.
Subrahmanyan was the head of L&T’s construction business when some of the company’s employees allegedly bribed Indian government officials in exchange for faster approvals to build Cognizant’s office campuses in Chennai and Pune.
The development comes barely a year after Subrahmanyan took over as L&T’s chairman and managing director on October 1, succeeding AM Naik, who had been chairman of the construction and engineering firm since 1999.
The US government has also sought depositions from four other L&T employees (Ramesh Vadivelu, Adimoolam Thiyagarajan, Balaji Subramanian and T. Nanda Kumar) and two former Cognizant employees (Venkatesan Natarajan and Nagasubramanian Gopalakrishnan), New Jersey court documents reviewed by Mint.
India’s Home Ministry had rejected the US State Department’s letter rogatory or formal request sent in March last year, court documents reviewed by the ministry show. MintThis prompted the US Department of Justice to seek help from its Indian counterpart under the Mutual Legal Assistance Treaty between the two countries.
The MLAT request was made on January 11 but was first disclosed in court documents in July by a lawyer for former Cognizant COO Gordon Coburn, who requested the trial be postponed from September to March next year.
Coburn resigned from Cognizant in October 2016 when the information technology company informed U.S. authorities that some payments made in India may have violated the U.S. Foreign Corrupt Practices Act. The act prohibits U.S. citizens and entities from bribing foreign government officials.
“Because the Indian government has refused to process the letters rogatory authorized by this Court, the only means to compel these witnesses to testify is through the Mutual Legal Assistance Treaty (MLAT) between the United States and India,” Coburn’s attorney, James P. Loonam, a partner at the New York-based law firm Jones Day, said in a filing. “Certainly, the critical evidence for a fair trial in this case lies in India.”
The filing, dated July 15, was made in a New Jersey court.
No respite for Cognizant’s former COO
In early 2019, Cognizant agreed to pay $25 million to the U.S. Securities and Exchange Commission to resolve bribery charges.
However, the US Justice Department has accused Coburn and former Cognizant general counsel Steven Schwartz of approving a $3.64 million payment to an Indian official in exchange for planning permission to accelerate construction of Cognizant’s office campuses in Chennai and Pune in the three years to 2015.
Both Coburn and Schwartz deny wrongdoing, but the Justice Department relied on thousands of documents shared by Cognizant and interviews with current and former company executives to establish that the two executives approved illicit payments from their contractor, L&T, to Indian officials.
“[A]”A postponement until approximately February 2025 would increase the likelihood that the jury will be able to evaluate the testimony of witnesses in India, subject them to cross-examination and avoid the possibility of high-level hearsay being admitted,” Coburn’s attorney, Loonam, told the court on July 26.
Last week, the judge presiding over the corruption case in a New Jersey court finally agreed to postpone the start of the trial until March of next year and asked the US government for time to submit its response to the MLAT’s request by November 25.
“Jury selection will begin on March 3, 2025,” Judge Michael Farbiarz said in his Aug. 15 order. “The trial will begin immediately following jury selection.”
While Cognizant is headquartered in Teaneck, New Jersey, and has a global workforce of more than 336,300 employees, 245,500 of them were based in India at the end of June. Earlier this month, the company reported better-than-expected growth for the June quarter, but noted that The technology services market remained challenging.
Counsel for Coburn, L&T and India’s home ministry did not respond. Mint emails
Subrahmanyan’s earlier denial
Subrahmanyan rose through the ranks at L&T after joining the company’s engineering, construction and contracts division in 1984 as an engineer. Naik mentored him and appointed him as L&T’s managing director and CEO on July 1, 2017, before taking over as chairman on October 1 last year.
On May 21, 2018, Subrahmanyan was “formally interviewed” in Singapore by officials from the U.S. Attorney’s Office and the Federal Bureau of Investigation.
Subrahmanyan, who headed L&T’s infrastructure business during the years the company is alleged to have paid bribes, told US officials that he “does not recall discussing planning permission” and heard nothing about a “request from a government official for improper payment”, Mint wrote in its August 7, 2023 edition.
Mint He first wrote about L&T’s alleged role in facilitating illicit payments in its February 17, 2019 issue. Subsequently, L&T’s board conducted an internal investigation and concluded that the company had no evidence of any executive’s involvement in the alleged bribes to unnamed Indian officials.
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