The US government has sought the deposition of Larsen and Toubro Ltd’s chair S.N. Subrahmanyan to ascertain if 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 are alleged to have bribed Indian government officials in return for faster approvals to build Cognizant’s office campuses in Chennai and Pune.
The development comes barely a year after Subrahmanyan took over as chair and managing director of L&T on 1 October, succeeding A.M. Naik, who had been the construction and engineering company’s chairman since 1999.
The US government has also sought the deposition of 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, show New Jersey court filings reviewed by Mint.
India’s ministry of home affairs had rejected the US State Department’s letter of rogatory or formal request sent in March last year, show court filings reviewed by Mint. This 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 11 January but disclosed in court filings in July for the first time by a lawyer for former Cognizant chief operating officer Gordon Coburn, who sought the postponement of the trial from September to March next year.
Coburn resigned from Cognizant in October 2016 when the information technology company informed American authorities that some payments made in India could have breached the US’ Foreign Corrupt Practices Act. The law prohibits US citizens and entities from bribing foreign government officials.
“As the Indian government has refused to process the letters rogatory authorized by this Court, the sole means to compel testimony from these witnesses is through the Mutual Legal Assistance Treaty (MLAT) between the United States and India,” Coburn’s attorney, James P. Loonam, a partner at New York-headquartered law firm Jones Day, said in a submission. “Without question, evidence fundamental to a fair trial, in this case, is located in India.”
The filing, dated 15 July, was made in a court in New Jersey.
No respite for former Cognizant COO
In early 2019, Cognizant agreed to pay $25 million to the US Securities and Exchange Commission to settle the bribery charges.
However, the US Department of Justice charged Coburn and former Cognizant chief legal officer Steven Schwartz with approving a $3.64 million payment to an Indian official in return for planning permits to speed up construction of Cognizant’s office campuses in Chennai and Pune in the three years to 2015.
Both Coburn and Schwartz deny any wrongdoing. But the DoJ relied on thousands of documents shared by Cognizant and interviews with current and former company executives to establish that the two executives approved the illicit payments by its contractor, L&T, to Indian officials.
“[A]n adjournment until approximately February 2025 would increase the likelihood that the jury will be able to evaluate the testimony of the witnesses in India, subject them to cross-examination, and preclude the potential for the admission of rank hearsay,” Coburn’s attorney Loonam told the court on 26 July.
Finally, last week, the judge presiding over the corruption case in a New Jersey court agreed to defer the start of the trial to March next year and asked the US government time to file its reply about the MLAT request before 25 November.
“Jury selection shall commence on March 3, 2025,” said Judge Michael Farbiarz in his order dated 15 August. “Trial shall commence 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 as at the end of June. Earlier this month, the company reported better-than-expected growth for the June quarter but signalled that the market for technology services remained challenging.
Coburn’s lawyer, L&T, and India’s ministry of home affairs did not reply to Mint’s 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. He was mentored by Naik and was appointed CEO and managing director of L&T on 1 July 2017, before taking over as chair on 1 October last year.
On 21 May 2018, Subrahmanyan was “formally interviewed” in Singapore by officials from the US Attorney’s Office and the Federal Bureau of Investigation.
Subrahmanyan, who headed L&T’s infrastructure business during the years when the company is alleged to have made the bribes, told the US officials that he “does not remember discussing the planning permit” and did not hear anything about a “request from a government official for improper payment”, Mint wrote in its edition dated 7 August 2023.
Mint first wrote about L&T’s alleged role in facilitating the illicit payments in its 17 February 2019 edition. Subsequently, L&T’s board conducted an internal probe and concluded that the company did not have proof of any executive’s involvement in the alleged bribes to unnamed Indian officials.