Mumbai: IT service provider Wipro Ltd has agreed to pay a civil money penalty of $5 million to US Securities and Exchange Commission (SEC) to settle a six -year old case related to embezzlement of funds by one of its employees.
In agreeing to the settlement, which is akin to the ‘consent mechanism’ in India, the company neither admits nor denies the SEC’s allegation that it violated certain provisions of the SEC Act of 1934.
The settlement came after the company strengthened its internal control mechanism to the satisfaction of the US securities market regulator. “The company considers the settled resolution of this long pending matter to be an efficient approach and in the best interest of the company and its investors to avoid the cost associated with a prolonged litigation,” Wipro said in a notice to the stock exchanges on Friday.
In December 2009, Wipro discovered that an employee embezzled funds amounting to Rs 22.8 crore.Upon discovery of the fraud, the company immediately took several steps, which included an internal and external investigation, hiring additional accounting and finance personnel and adopting the recommendations of auditors and consultants.