EDS reports investigation of payment in India

PRINCETON: Electronic Data Systems Corp., the world's No. 2 computer-services company, said U.S. regulators are investigating allegations that a former employee made payments to gain business in India.

The employee in India worked for an unnamed Electronic Data subsidiary, the company said in a Securities and Exchange Commission filing today. Electronic Data said it reported the situation to the SEC, which is investigating.

Is social media more addictive than cigarettes?

	YES
	NO

   View result

Electronic Data and rivals including Accenture Ltd. are cutting costs by hiring in India, where workers can handle software management and data processing cheaper than in North American and Western Europe. Electronic Data's quarterly statement didn't disclose details of the alleged payment.

The SEC is also investigating Electronic Data for a $559 million Navy contract write down, transactions with auto-parts maker Delphi Corp., derivative contracts related to employee stock plans and events leading up to a forecast cut in 2002.

Plano, Texas based Electronic Data notified the SEC of the alleged payments early last year, and disclosed the investigation after the agency requested documents following the company's last quarterly filing in May, spokesman Terry Balluck said.

The Foreign Corrupt Practices Act prohibits payments to officials outside the U.S. to obtain or keep business. Companies can be fined as much as $2 million per violation and employees and officers are subject to fines and prison sentences.