Info-tech

TCS sets aside $440 million for Epic case

Varun Aggarwal Mumbai | Updated on June 15, 2018

While Tata Consultancy Services received a respite from trade secret lawsuit filed against it in the US last year trimming its payout by more than half, the company still expects fines to go up, as per its annual report.

“In September 2017, the Company received a Court order reducing the damages from ₹6,114 crore ($940 million) to ₹2,732 crore ($420 million) to Epic. The Company has received legal advice to the effect that the order and the reduced damages awarded are not supported by evidence presented during the trial and a strong appeal can be made to superior Court to fully set aside the Order,” TCS said in its annual report.

In 2016, US grand jury order slapped two Tata group companies — Tata Consultancy Services and Tata America International Corp — with a $940-million fine in a trade secret lawsuit filed against them by Epic. The companies were accused of “brazenly stealing trade secrets, confidential information, documents and data” belonging to Epic. The fine was later reduced to $420 million in September last year. TCS, however, continues to contest charges.

TCS said a Letter of Credit has been made available to Epic for ₹2,862 crore ($440 million) as financial security in order to stay execution of the judgement pending post-judgement proceedings and appeal. “Accordingly, an amount of ₹2,862 crore ($440 million) is disclosed as contingent liability as included in the claims not acknowledged as debts by the Company.”

The question about the provision was raised during TCS’ annual general meeting, where at least two shareholders brought it, asking not only why the provision is made but also whether the company has invested as to who was responsible for this information stealing.

“Can you explain why the company is issuing a letter of credit of $440 million to EPIC even though the fine was reduced to $420 million?” asked TCS shareholder Tamal Majumdar.

“Who is responsible for this? What action has TCS taken against this person,” asked another investor questioning the management over the EPIC case.

TCS Chairman N Chandrasekaran did not respond on the query about the action taken against the people responsible but pointed out that since the case is still in the court, “we have to wait”.

Published on June 15, 2018

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