Probe by US agency reveals Larsen and Toubro limited (L&T) bribed Indian government officials on behalf of American clients

Construction giants Larsen and Tourbo (L&T) limited seem to be landing in a major trouble, after it was revealed that they paid bribes to Indian government officials on behalf of their international clients Cognizant Technology Solutions Corp.

The US based company allegedly routed bribes through L&T to Government officials in Pune and Chennai to obtain several permits ranging from environmental clearance to power, for their campuses in both the cities. Both the campuses were being built by L&T.

L&T in 2014 paid $2 million in bribes to a senior government official on behalf of their clients, for the issuance of a planning permit for campus in Knowledge Industry Township in Chennai, says a probe by US Securities and Exchange commission.

A year before, in 2013, L&T had paid $770,000 in bribes to a Maharashtra government official for seeking environmental clearance for a campus in Pune. Finally, L&T again paid $870,000 in bribes to government officials for construction-related permits in Siruseri, Chennai in 2015, again on behalf of their US based client.

This is not the first occasion time when L&T is making headlines for financial mismanagement and irregularities. In 2013, The World Bank had banned Larsen & Toubro (L&T) from doing any business with it or the projects funded by it for six months, after finding that a senior executive of the conglomerate was indulged in fraud.

Again in 2018, the Serious Fraud Investigations Office (SFIO) had sought permission from the Ministry of Corporate Affairs, to probe Larsen & Toubro and its subsidiaries, over allegations of misappropriation of funds and bank loans.

The SFIO’s move followed allegations by Kahkashan Perween, a Rajya Sabha MP from Bihar, that L&T and its subsidiaries may have loans aggregating to ₹8,000 crore from various public sector banks and they “face the serious threat of becoming NPAs.”