Oracle slapped with $23 million fine for bribing officials of Indian Railways-owned firm

The public cloud sector in India is expected to grow at a healthy rate of 24 per cent to become a $13.5 billion business by 2026. Like any developing nation looking to capitalise on tech, India has the likes of Meghraj, which is a national cloud system, and Indian Railway’s RailCloud, to boost public services. But India’s digital push has been blemished by corruption, as cloud services provider Oracle has been fined $23 million for paying bribes worth $400,000 to officials of a firm owned by India’s railway ministry.

Took place during Piyush Goyal’s term

The penalty was slapped by the US Securities and Exchange Commission (SEC), for paying off officials in India, UAE and Turkey. Oracle paid bribes in India during Piyush Goyal’s term as Minister of Railways in 2019, and the money was sent to state-owned entity (SOE) officials. The firm had kept $67,000 to pay a particular SOE official in India, and the SOE’s site showed that it had mandated the use of Oracle’s software products, hence blocking out any competition.

Creating piles of dirty money

Oracle has also faced action for amassing slush funds in the past, which is a pile of money set aside to be spent on illegal activities, including corruption. Employees of Oracle in India, Turkey and UAE used fake discount schemes and marketing reimbursement to funnel money towards these slush funds. Regulatory authorities of all three countries, including SEBI from India assisted SEC with the investigation into Oracle’s corrupt practices.

Oracle India officials had also been caught managing slush funds via distributors back in 2012. After the current action by SEC, Oracle said that such behaviour by employees is against their policies and they’ll act against anyone indulging in corruption.

Corruption plaguing India’s public sector?

This comes shortly after CBI arrested three Indian Railway officials for accepting bribes to allot freight rakes in the East Central Railway. India has also been ranked as the 80th most corrupt nation among 180 countries, and was found to be second in terms of probing bribery by foreign firms in 2020. The SEC verdict might also affect Oracle’s target to achieve three-digit growth in India and to challenge market leaders such as AWS and Google Cloud in the country.