Wipro settles 6-year old US SEC probe with $5 million fine

The civil money penalty will be paid by Wipro to close an investigation launched by the US SEC in an embezzlement case.

wipro, us sec, wipro settles case with us sec, share price, wipro q3 — Stewards are seen behind desks with the logo of India's third-largest software services firm Wipro Ltd inside the company's headquarters in Bengaluru, India, October 21, 2016. The Azim Premji-controlled company agreed to pay $5 million to settle a case with the US SEC that was initiated in 2010.Reuters file

Wipro, India's third-largest IT software services exporter, on Friday informed the Bombay Stock Exchange (BSE) that it will be paying $5 million to the US Securities and Exchange Commission (SEC) to settle a six-year-old investigation. The Wipro stock was trading flat at Rs 457 at around 12.45 pm.

In a regulatory filing, the company said that the probe pertained to a case of embezzlement about which it had made adequate disclosures in its financial statements in the financial year 2009-10.

"Under the terms of settlement, the company consents to pay a civil money penalty of $5 million, to cease and desist from committing or causing violations of the Exchange Act and to undertake certain follow-through actions," Wipro said in its filing to the BSE.

The investigation by the US capital markets regulator was launched in 2010, after Wipro detected and reported a case of embezzlement by one of its employees in December 2009 that was estimated at about $4 million. "The company was able to substantially recover the embezzled funds," it said.

Wipro added that the settlement with the regulator was in the best interests of its investors "to avoid the costs associated with a prolonged litigation."

The company will be declaring its third quarter results on January 25, 2017.

In related news, Wipro had announced acquisition of Appirio, a global cloud services company for $500 million in October this year. The 10-year-old company is headquartered in Indianapolis and had with offices in San Francisco, Dublin, London, Jaipur, and Tokyo with an strength of 1250 employees worldwide.

"Appirio and Wipro are coming together to unlock transformational synergies in the applications space and help enterprises create new business models," Abidali Z. Neemuchwala, chief executive officer & member of the board, Wipro Limited, said in a statement on October 20, 2016.