TCS settles US lawsuit for $26 mn

Tata Consultancy Services (TCS), the country’s largest information technology (IT) services provider, said it had settled an ongoing lawsuit with Orange County in California, USA. For doing so, it has agreed to pay $26 million (~175 crore).

The three -year dispute was over a failed replacement to the County’s automated property tax system, initially to be completed by 2010 but not delivered.

After the announcement, TCS’ shares were down by 1.2 per cent and closed at ~2,571.90.

“Both parties had claims against each other but neither admits any liability. The settlement was reached after a mediation conducted by judge Jay C Gandhi, representing a compromise between the two parties versus the prospect of a lengthy trial,” said a TCS spokesperson.

The mediation settlement was late last month and a board of supervisors there approved the proposal. After which, last Friday, the county was notified that the settlement payment from Tata had been wired to the former’s treasurer.

Had the litigation not been settled, there would have been a trial. The county sued Tata in 2013, claiming the software giant had violated the California False Claims Act and was guilty of fraud, intentional misrepresentation, negligent misrepresentation and fraudulent concealment, as well as breach of contract.

The software programme in question was meant to interface on behalf of the relevant departments there to generate annual tax bills for secured and unsecured property.