Computing giant, Oracle has agreed to pay $2-million in fine over charges that its Indian subsidiary kept a multi-million dollar funds secret.

The Securities and Exchange Commission has said that it has submitted documents with allegations with the San Francisco District Court. The documents accuse Oracle of violating the US Foreign Corrupt Practices Act because it did not prevent its Indian subsidiary from setting up a secret multi-million dollar fund.

The regulator said in a statement that the Indian subsidiary kept the money that was received from sales to Indian government agencies over 2005-2007, secret in a fund. It also said that the fund was then sued for `unauthorized payments to phony vendors' in the country.

The SEC did not say that bribery was involved in the payments but said that it might be involved in payments to such vendors. The regulator said that Oracle voluntarily disclosed the fund and also cooperated with the investigation and had fired employees that were involved in wrongdoing.

"In fact, none of these storefront-only third parties provided any services or were included on Oracle's approved vendor list. The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement," SEC said in a statement.