CSC faces fraudulent charges on nationwide U.K. IT contract
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U.K. government officials pitched a $17 billion IT program to the curb late September, according to The Wall Street Journal, noting that more than $6 billion had already been wasted. CSC was one of the software suppliers for this program.
The Ontario-based single-profession pension plan filed the complaint on Sept. 26 in the U.S. District Court Eastern District of Virginia, Alexandria Division, individually and on behalf of all other persons and entities that purchased or acquired CSC common stock from Aug. 5, 2008 through Aug. 9, 2011.
According to the complaint, the action is the result of two alleged schemes perpetuated by CSC. “The first related to CSC’s fraudulent statement about the performance under CSC’s $5.4 billion contract with the National Health Services of the U.K. (NHS),” the filing said. “Under the NHS contract, CSC agreed to build a computerized medical records system and develop the necessary software to create digitalized medical records for all U.K. residents living within the regions covered by the contract.”
The document continued that although CSC repeatedly asserted that the project was “on track” to be delivered by 2012, CSC’s “representations were false because they had known, at least since May 2008, that CSC could not deliver [the software system] as promised.”
The plaintiffs maintained that CSC should have recognized a loss on the NHS contract in 2008.
In addition to the NHS contract, OTPPB claimed that CSC made fraudulent statements about CSC’s financial results in fiscal year 2010 and its internal controls, primarily in connection with the company’s operations in Europe’s Nordic region.
Read the court filing here.