Cognizant Investigating Indian Payments

Cognizant Technology Solutions Corp. said it was conducting a probe into whether payments in India violated a federal anti-foreign-corruption act, and that its president had resigned.

Shares dropped 5.8% to $51.83 in premarket trading on the news.

The company said Friday that it notified the Justice Department and the U.S. Securities and Exchange Commission that it was conducting an internal investigation into whether payments relating to facilities in India were made improperly and possibly violated the U.S. Foreign Corrupt Practices Act.

Cognizant also said in the same filing that President Gordon Coburn resigned and would be replaced by Raj Mehta, who had been the chief executive for IT Services. No reason was given for Mr. Coburn's resignation, and the company didn't immediately respond to requests for comment on whether the resignation was related to the investigation.

While the investigation is in its early stages, the board's audit committee and outside lawyers are focusing it on a "small number of company-owned facilities."

At the end of 2015, the company had 162,500 employees, or nearly three-quarters of its workforce, in India across 45 locations with 22.6 million square feet.

Cognizant Technology provides information technology, consulting and business process services.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

September 30, 2016 09:35 ET (13:35 GMT)

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