Two days before its results for the quarter ended March 2016, India’s largest information technology services provider Tata Consultancy Services (TCS) has been slapped with a fine notice of $940 million (Rs 6,204 crore) by a federal jury in the US in a trade secret lawsuit.
Though the trial court has not given its final verdict yet, TCS said it plans to defend its position. It also stated that the jury verdict will not have any impact on its Q4 and FY16 financial results.
If this fine is finally imposed, it would be nearly Rs 200 crore more than the company's net profit of Rs 6,083 crore in the third quarter of FY 16. Analysts have estimated the fourth quarter profit at Rs 6,277 crore, which would be just about enough to cover the fine.
The lawsuit was filed by Verona-based electronic medical records vendor Epic Systems in October 2014, and said TCS and its US subsidiary Tata America International Corp have taken confidential data from them.
The federal jury in the US State of Wisconsin ruled that TCS and Tata America International Corp must pay $240 million to Epic Systems for ripping off its software.
In addition, the Tatas have also been asked to pay $700 million in punitive damages.
In a statement, TCS said: “The company did not misuse or derive any benefit from downloaded documents from Epic System’s user-web portal. TCS plans to defend its position vigorously in appeals to higher courts. TCS appreciates the trial judge’s announcement from the bench that he is almost certain he will reduce the damages award.”
