IndUS Business Journal

Wipro promoters not envisaging sale: Azim Premji

Jun 5, 2017 0

New Delhi–Wipro Chairman Azim Premji on Monday said that company’s promoters are not envisaging sale of their holdings.

“The news article about promoters of Wipro evaluating sale of their holding in the company is baseless and malicious. There is no truth to these unsubstantiated rumours,” Premji said in a letter to the company’s employees.

“I continue to be incredibly excited about the potential of the IT industry and Wipro. I see enormous energy within the company to power the success of our clients and therefore the success of Wipro,” he added. (IANS)

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India, France pledge to take Paris accord forward

Jun 4, 2017 0

Paris–A day after the much-attacked withdrawal by the US, India and France on Saturday pledged themselves to take the Paris accord on climate change forward with Prime Minister Narendra Modi saying he will go beyond the agreement even as the two countries vowed to jointly fight the scourge of terrorism.

“India is with the Paris accord and even beyond that we will walk together and work together and leave a legacy for the future generations. In this direction India and France have taken several measures and discussed Indo-French partnership for sustainable technology,” Prime Minister Narendra Modi declared at a joint media interaction after talks with new French President Emmanuel Macron at the Elysee Palace.

“Paris accord is a shared legacy of the world. The way we worked shoulder to shoulder, it is such a contribution of the present generation which gives birth to a new hope for becoming legacy for the future generations. It is a shared legacy of the world,” he said.

“It is not just a question of protection of environment but it is the joint responsibility of all of us to save Mother Earth. It is our duty. For me and Indians preserving environment is an article of faith. What we got from our ancestors it becomes our responsibility to give pure water and pure air to the coming generations and the future world,” he said.

On his part, the French President said first and foremost our commitment is to climate change and France will continue till the end in its implementation of the accord.

The assertion by the two leaders came a day after US President Donald Trump announced his decision to pull out of the Paris Accord, blaming among other things, India and China who he said were benefiting unfairly in billions of dollars. Trump’s decision to pull out of the accord, which seeks to curb carbon emissions and has been agreed by almost all countries, has come under global attack.

Observing that the world is passing through a crisis, Modi said that he and Macron discussed terrorism extensively, on how to save the world from terror and radicalisation, and how to “go forward in deradicalisation and how to strengthen the fight against terror.”

Earlier, Macron said France, which has seen some of the worst terror attacks in recent times, would stand by India in its fight against terrorism.

Modi said that at the time of the Paris accord an International Solar Alliance (ISA) was launched. “I see a bright future for ISA as it was born out of joint efforts of India and France. I am happy that President Macron is fully committed to it and we will achieve success.”

Referring to climate change and terrorism as two major challenges before the world, Modi said, “We cannot see the danger of climate change but we can see the horrific effects of terrorism, we can feel it. Innocent people, women, children lose their lives to terror. Every child in France understands the danger of terrorism as it has experienced it.”

“Today a large part of the world is facing this problem. We discussed in detail that what could be the ways to tackle radicalisation, how to be alert to use of technology (by terror groups), how to strengthen the movement towards deradicalisation and how the world can move forward in peace and amity,” he said.

Complimenting Macron on his electoral victory, Modi expressed the hope that the French leader’s “energetic, visionary and young leadership” would provide strong and successful helming for not only France but also contribute to a strong European Union to maintain a balance in the global order.

Modi thanked Macron for accepting his invitation to visit India.

He also shared the French President’s views on greater exchange of students programmes between the two countries and said they will strengthen it.

“The canvas of our relationship is very wide covering technology, trade, innovation, investment, education, energy, entrepreneurs, defence and communication. All these are important for us. The canvas is so wide that you can make out whether it is smart cities where the French have made investments and communication cooperation,” he said.

Modi said the bilateral relations between the two countries are very deep in every sector. It is not limited just to two countries but it is helpful in the global context – “How we can move forward on the common good of the global context,” he said.

In his remarks Macron said that the first and foremost of their commitment is to the climate change accord and they will continue till the end in its implementation.

“Both our countries are committed to work together in defence cooperation, maritime security and fighting terrorism on the internet too. France will stand by India in the fight against terrorism,” he said.

Macron said France is also committed to taking initiatives in tapping solar energy as part of harnessing renewable energy.

He said France wants more Indian students to come to France for education and similarly French students going to India.

He said that the French government would like more exchanges between the two countries in literature and cinema.

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Gold to be taxed at 3 percent, beedis at 28 percent

Jun 4, 2017 0

New Delhi– The GST Council on Saturday completed the work of bringing all items under a 4-slab tax structure with gold attracting 3 per cent rate, ending suspense on the item dear to Indians, even as all states barring West Bengal agreed on the rollout of the new indirect tax regime on July 1. Industry said that traders need to gear up for the transition as more delay was unlikely.

“Gold currently has an excise of 1 per cent and state charge around 1 per cent VAT… keeping these various taxes in mind, and after a lot of debate in the GST Council, we have finally reached a consensus on 3 per cent for gold and gold jewellery,” Union Finance Minister Arun Jaitley, who heads the Council, told reporters here after its 15th meeting.

Besides, rough diamonds will have a nominal tax of 0.25 per cent in order “to keep the audit trail” of transactions, he said.

While beedi leaf, or “tendu” will be taxed at 18 per cent, beedis will be levied tax at 28 per cent, he said, adding they, unlike cigarettes, which not attract cess over and above these taxes.

Footwear costing below Rs 500 will be taxed at 5 per cent, while those costing more will attract 18 per cent.

Regarding items of use by the common man, Jaitley said that even manufactured apparel costing less than Rs 1,000 would be taxed at 5 per cent.

Revealing that textiles was a major topic of discussion as it is a mass consumption item, he said that while cotton and all other natural fibres are in the 5 per cent bracket, “man-made” fibre will attract a levy of 18 per cent.

All yarn will be taxed at 5 per cent but man-made fibres at 18 per cent.

“Fabric of all categories will have 5 per cent tax, while for ‘made-up apparel’ it will be 12 per cent,” Jaitley said.

“Packaged food items sold under registered trade marks, which are sold at a much higher price (than food) would carry a rate of 5 per cent,” he said, adding biscuits, both of cheap and expensive varieties, would be taxed at 18 per cent.

The GST Council had convened here for its 15th meeting to finalise the rate fitment of the remaining six items, including gold as 1,211 other items had been decided at its previous meeting in Srinagar last month.

Jaitley also said that in view of the many representations received on the fitments, the committee of officials would take up these cases.

These, as well as other pending matters, would be discussed at the next meeting of the GST Council that has been scheduled to be held here on June 11, he added.

The GST Network (GSTN) made a detailed presentation at Saturday’s meeting on their IT preparedness for implementation.

“Members questioned the GSTN extensively on their level of preparations and the GSTN expressed confidence it is fully ready for the work assigned to it,” Jaitley said.

However, West Bengal Finance Minister Amit Mitra, who had earlier this week voiced serious doubts about the preparedness of the industry for GST by July 1, continued to be doubtful about the GSTN’s readiness.

“Entire GST will depend on one IT system of GSTN. The presentation given by them clearly shows that they are not ready and need more time. They have appointed 34 Suvidha providers for the whole country.. will that be sufficient?

“We are not opposing GST. We support it. But the July 1 deadline should be extended. There should be more meetings, discussions,” he told reporters.

Queried about Mitra’s position, Jaitley said that “the others did not share that view”.

Rajeev Dimri, Leader, Indirect Tax, BMR and Associates LLP, said that with the decision to implement GST from July 1, the “onus now lies on the industry to prepare” as “adequate information is now available in the public domain vis-a-vis return formats and rules, thus it is critical for the industry to gear up their IT systems for meeting reporting requirements..”

Confederation of All India Traders Secretary General Praveen Khandelwal said that “much preparedness is required at the level of traders”. “Obviously many challenges will occur which needs to be sorted out and as such trial period is required,” he said.

Welcoming the 3 per cent tax rate on gold, World Gold Council’s Managing Director, India, Somasundaram P.R. termed it an “encouraging step in the current context to stabilise the industry and address the concerns of the millions employed in the industry”.

The Cotton Textiles Export Promotion Council (TEXPROCIL) Chairman Ujwal Lahoti said that the 5 per cent was is very progressive and will lead to the growth and development of the entire value chain.

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Construction, transport, retail may create most jobs: Assocham

Jun 4, 2017 0

New Delhi– Amid the controversy on jobless growth in India, industry chamber Assocham on Sunday cited its report holding that sectors like real estate, retail, wellness and transport and logistics may create most jobs in the near future.

The Associated Chambers of Commerce and Industry of India (Assocham)-Thought Arbitrage Research Institute joint report also said India’s information technology and IT-enabled services (ITeS) sector may add at best one million jobs in the next five years.

“The IT and ITeS (sector), which is under pressure at present, in any case, was to expand at a lesser pace in job creation. On the employment base of 3.3 million in 2013, the much-touted sector had an incremental human resource requirement of 2.2 million by 2022, of which about one million have been added in the last 3-4 years,” it said.

“Thus, as a country which requires at least 15-20 million jobs a year, we need to look quite broader and at those areas which expand not only in the export market but also within the country,” Assocham Secretary General D.S Rawat said in a statement.

According to the report, building, construction and real estate, including infrastructure, sector would require 31.1 million incremental jobs.

“The sector has been the worst-hit because of multiple factors including high level debts and non-performing assets, delays in delivery of housing projects, and environmental and regulatory hurdles. We need to get these issues out of the way in a manner that it becomes a robust engine of job creation and economic growth,” Rawat said.

Besides, organised retail can create incremental level of at least 10-12 million new jobs in the next five years, while textiles and clothing can also be a potential area of job creation, the report added.

The central government think-tank the Niti Aayog on Friday trashed unemployment surveys as unreliable and said it has set up a task force to produce authoritative annual nationwide employment data based on household surveys.

“We don’t have an existing survey from which we can get the numbers (of unemployed). In the process, the debate on jobs has happened in a vacuum,” Niti Aayog Vice Chairman Arvind Panagariya told reporters, while referring to surveys done by the Labour Bureau in 2015 which showed that only 135,000 jobs were added by certain sectors that year.

“There is serious problem with these surveys in eight sectors of the economy, where the total workforce covered is three crore, out of a countrywide workforce of around 47 crore,” he said.

“Even these three crore come from 11 states. It is a non-random survey sample from which you’re trying to arrive at the population numbers, which you cannot. One can’t extrapolate from the sample to the population,” he added. (IANS)

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World Bank keeps 2017 global growth forecast at 2.7 percent

Jun 4, 2017 0

Washington– World Bank on Sunday maintained its forecast for global growth in 2017 and 2018 unchanged at 2.7 per cent and 2.9 per cent, respectively, as manufacturing and trade are picking up and confidence is improving.

“A bright spot in the outlook is a recovery in trade growth to 4 per cent (in 2017) after a post-financial crisis low of 2.5 per cent last year,” Xinhua quoted the World Bank’s Global Economic Prospects (GEP) report as saying.

The recovery in trade growth in 2017 is supported by stronger demand from major advanced economies, increased trade flows to and from China, and a diminished drag from weak demand from commodity exporters, said the World Bank.

Stronger trade also reflected the improved outlook for global growth. According to the forecast, advanced economies are expected to grow 1.9 per cent in 2017, accelerating from the 1.7 per cent growth in 2016, said the World Bank in its flagship Global Economic Prospects (GEP) report released on Sunday.

However, it expected the advanced economic growth to slow to 1.8 per cent in 2018 and 1.7 per cent in 2019, in line with its forecasts in January.

In emerging market and developing economies, growth is expected to accelerate to 4.1 per cent in 2017 from 3.5 per cent in 2016. The growth is projected to pick up pace in 2018 and 2019, and will reach 4.5 per cent and 4.7 per cent respectively.

“After a prolonged slowdown, recent acceleration in activity in some of the largest emerging markets is a welcome development for growth in their regions and for the global economy,” said Ayhan Kose, director for the GEP program at the World Bank.

Growth among the world’s seven largest emerging market economies, namely China, Brazil, India, Indonesia, Mexico, Russia and Turkey, is expected to surpass its long-term average by 2018.

“Recovering activity in these economies should have significant positive effects for growth in other emerging and developing economies and globally,” said the report.

World Bank expected Chinese economy to grow 6.5 per cent this year and 6.3 per cent in 2018 and 2019, in line with its forecast in January.

Fiscal support is expected to continue to offset monetary tightening, said the World Bank. It expected government policies will continue to support growth, contain financial risks, and encourage a rebalancing of the economy to more of a focus on consumption.

The US economy is projected to grow 2.1 per cent this year, 0.1 percentage point lower than the World Bank’s forecast in January. However, it raised the forecast for US growth in 2018, up 0.1 percentage point to 2.2 per cent. The growth will again slow to 1.9 percent in 2019, as it moves closer to potential.

Tax cuts and infrastructure programs could lead to stronger-than-expected growth in the short term, but also to a more rapid increase in interest rates. (IANS)

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Tech Mahindra leads as global engineering R&D services provider

Jun 4, 2017 0

Bengaluru, June 4 (IANS) Software major Tech Mahindra has been recognised as a global engineering and R&D services provider based on the comprehensive assessment of its ‘Design to Build Engineering’ capabilities by management consulting firm Zinnov, the company said on Sunday.

The study titled ‘Zinnov Zones – Product Engineering Services (PES) 2016’ placed Tech Mahindra Integrated Engineering Solutions (IES) in the ‘Leadership Zone’ in seven industries — such as aerospace, automotive, telecom, industrial, energy and utilities, transportation, and consumer electronics — and ‘Expansive and Established’ zone for two horizontals — Mechanical Engineering Services and Embedded Systems.

“We are delighted to be recognised as a leader among global engineering players. The ratings are testimony of our ability to integrate design, styling, new age customer experience through design thinking approach and help transform our customers as a product engineering partner,” said Karthikeyan Natarajan, Global Head (Engineering, IoT and Enterprise Mobility), Tech Mahindra.

The rating validates Tech Mahindra’s capabilities across parameters including breadth and depth of services — non-linear offerings, innovation, talent, delivery excellence, customer connect, strategic partnerships, infrastructure and new engagement/business models.

For the study, Zinnov selected top 50 R&D Product Engineering service providers from an initial list of 200+ service providers across geographies like India, China, Russia, Eastern Europe & APAC. (IANS)

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India to take up road and highway projects abroad: Minister Nitin Gadkari

Jun 4, 2017 0

By Rohit Vaid

New Delhi–The government is planning to launch a dedicated international subsidiary of the National Highways Authority of India (NHAI) to take up roads and highway projects abroad, particularly in South Asia.

Simultaneously, India is also looking forward to setting up joint ventures (JVs) for road construction in neighbouring countries.

Union Transport Minister Nitin Gadkari said his ministry was considering a proposal to launch “NHAI International” for undertaking roads and highway construction projects abroad.

Experts say that such a subsidiary could be in the form of a special purpose vehicle (SPV) which will collaborate with foreign companies to bag international projects.

The minister said India is keen to participate in road construction in neighbouring countries like Iran, Nepal, Bhutan, Bangladesh, Myanmar and Sri Lanka through joint ventures.

Nitin Gadkari

“We are promoting road construction joint ventures in Nepal, Bhutan, Bangladesh, Myanmar and Sri Lanka. Sri Lanka has already agreed to allot a couple of road projects in northern Sri Lanka to us,” Road Transport and Highways Minister Gadkari told IANS in an interview.

“We have plans to develop road projects in Iran as part of the development of Chabahar Port-related projects.”

On the domestic front, the minister has set his sights on achieving a target of construction of 40 km of roads per day in the next year or so.

“If I could achieve 23 km per day from the rock bottom 2 km per day in three years, there is no reason I could not reach close to my next target of 40 km per day in the next one year or so,” Gadkari said.

“Projects like road and highway construction, including tunnels, over-bridges and roadside amenities and other related projects also depends on various other factors like weather conditions and local issues.”

As per various estimates, India has one of the longest road networks across the world at over five million kilometres. The network consists of national highways, state highways, major district roads and rural roads.

Out of the total road network, national highways and expressways account for only two per cent, but are used to transport more than 40 per cent of all goods and passenger traffic.

The slow average speeds on these highways due to high road density and non-availability of access-control measures allows cargo laden trucks to travel only 225-250 km per day.

The overall target is to increase the national highways length to two lakh kilometres but delays in land acquisition and a famine of private investment has slowed down progress.

For 2016-17, 23 km of roads were constructed per day, up from 16.6 km a day in 2015-16.

In the Union Budget 2017-18, the central government allotted Rs 64,000 crore ($9.55 billion) to NHAI for roads and highways and Rs 27,000 crore ($4.03 billion) for the Pradhan Mantri Gram Sadak Yojana (PMGSY) that is focused on rural roads.

However, road and highway construction did not gather pace automatically, as the minister recalled three years back there were 400 projects which were stuck due to problems relating to land acquisition, environment and forest clearances, and rail over bridges.

“There was an atmosphere of gloom and disillusionment. Contractors were unwilling to continue with the projects and bank NPAs (non-performing assets) were piling up,” Gadkari said.

“I encouraged all the stakeholders and organised face-to-face meetings with the state government officials, bank managers, NHAI officials and the contractors.

“In the last three years we have collectively resolved most of the knotty issues, cleared road blocks and put the projects back on track. There is hardly any project which is stuck.” (IANS)

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Opinion: Will US withdrawal stop India’s actions against climate change? The answer: No

Jun 3, 2017 0

By Ajay Mathur

Will the US withdrawal from the Paris agreement impact Indias efforts to tackle climate change? To a limited extent, yes. Will it stop Indias actions against climate change? No.

President Trump’s announcement of the US withdrawal from the Paris agreement leaves a huge void in the global efforts to stabilise our climate. The US is by far the largest historical emitter of greenhouse gases, and its actions in reducing emissions are central to global efforts to address climate change.

The Paris Agreement had provided an innovative framework for all the countries of the world to pledge what they could do to address climate change; it brought all countries on board, with each country pledging what it expected to achieve.

The sum total of all the pledges made at Paris are clearly not sufficient to ensure that global temperature rise remains well below 2 degrees Celsius, which scientists believe is the maximum to prevent irreversible climate change.

The absence of the US leadership would delay actions to address climate change in that country itself, as well as in other countries to reduce global emissions and to adapt to the adverse impacts of the climate change that has already occurred.

Climate action, whether to mitigate emissions or adapt to adverse impacts of climate change, requires access to financial resources and technology. New technologies that would address these issues are always more expensive that technologies currently in use, and the countries of the world have created the Green Climate Fund (GCF) to manage these costs.

The withdrawal of US support to the GCF would substantially reduce the resources available to it, and so will inhibit acceleration of climate actions in developing countries, including India.

The US will now put out more carbon dioxide into the atmosphere than it would have had it remained in the Agreement. This will have adverse impacts for India and many other vulnerable countries. In any case we have to manage the unavoidable climate change that has occurred due to the carbon dioxide already in the atmosphere.

This would be further exacerbated, implying that India would need to enhance its adaptation actions so that it can continue to manage the impact of inaction or delayed action in the US.

The good news is that the last few years have seen a major downward trend in the prices of renewable energy and energy efficiency, the pillars for action to combat climate change. These positive trends suggest that climate mitigation is becoming increasingly viable across the world – and, as a result, many countries, and many states in the US, are preferentially moving towards larger shares of renewables in their energy mix.

This trend will continue across the world and in the US, irrespective of the US decision to withdraw from the Paris agreement.

The favourable long-term trends in the costs of renewables and energy efficiency are clear. Chances are, the world, US included, would transition to low and zero carbon technologies over time.

Ever since India submitted its pledge, it has carried out a raft of actions and policy changes to achieve its goals. Large scale procurement of solar energy has both increased the share of non-fossil fuel sources in our grid and has also been successful in bringing down the price of solar energy to a point where it is competitive with coal.

Our programme to promote LED lighting is immensely successful, with over 300 million LED bulbs sold and prices reduced to a fifth, making large scale adoption possible.

What these changes indicate is that our renewable energy capacity would increase eight-fold, and our demand for coal would be limited to doubling to about 800-900 million tonnes in 2030, instead of about 1,200 million tonnes if accelerated action on renewable and energy efficiency did not occur.

It is estimated that even if the US had kept to its Paris pledge, its coal use in 2030 would probably be similar to that of India in that year, even though India’s population is three times larger. Despite these challenges, India is pushing ahead with a low carbon growth strategy in the medium and long term.

At the time when we submitted our pledge, Prime Minister Narendra Modi had said that India’s action on climate change represented an article of faith because of its own needs to ensure that development and environment protection go hand in hand.

This imperative continues, and Power Minister Piyush Goyal said at the Vienna Energy Forum last month: “We stand committed to each and every one of those commitments made in Paris, irrespective of what happens in the rest of the world.”

(Dr Ajay Mathur is Director General, The Energy and Resources Institute (TERI) and was spokesperson of the Indian delegation to the 21st Conference of Parties, Paris. Views are personal.)

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Digital Health Acquires Constant Therapy Founded by Veera Anantha

Jun 2, 2017 0

BOSTON–Digital Health Corp. has acquired Constant Therapy, a privately held developer of mobile solutions that was founded by Veera Anantha, the company said in a statement.  Terms of the acquisition were not disclosed. Constant Therapy’s mobile solutions are aimed at treating patients with traumatic brain injury, stroke, aphasia, and learning disorders.

“We are delighted to join Digital Health Corp; its mission of helping patients get better at home resonates completely with the values, culture and products we have developed at Constant Therapy,” said Anantha.

Veera Anantha, Founder and CTO of Constant Therapy

Constant Therapy designs mobile applications for continuous and customizable therapy for people with speech, language, cognition, memory, and learning disorders. Born out of groundbreaking research at Professor Swathi Kiran’s laboratory at Boston University, the company’s comprehensive set of tools are in use at nationally recognized rehabilitation institutions for stroke survivors, victims of traumatic brain injury (TBI), people struggling with aphasia or dementia, and children who need special education and care due to learning disabilities.

With 65 task categories and a growing library of over 100,000 exercises, patients can augment their in-clinic therapy sessions on their own time, in the safety and comfort of their own homes, and continue to progress through the exercises in-between clinic visits or after in-clinic therapy has finished.

Swathi Kiran

“Research has proven that brain injury and stroke survivors can push past a supposed ‘progress plateau’ and improve with effective and continuous brain rehabilitation. Constant Therapy’s on-demand and easy-to-use technology, based on extensive clinical research and thousands of active users, helps these patients and others with less severe cognitive disorders, continue to make progress at home, on their schedules,” said Dr. Joseph (Joe) Smith, MD, PhD, President and CEO of Digital Health Corp. “This technology is a perfect strategic complement to Digital Health Corp’s growing portfolio of patient recovery and rehabilitation solutions that provide evidence-based and affordable therapy options to help patients get better in the comfort and convenience of their own homes.”

Dr. Smith added:  “We are excited to build upon Constant Therapy’s early-stage success by expanding and enhancing its speech language therapy programs. These enhancements will be supported by the continued development of a compelling, deep, and rich body of clinical evidence under the new The Learning Corp brand name that is unparalleled in this space.”

The company’s technologies, marketed under the Constant Therapy and NeuroPerformance Engine™ brands, are currently available in the U.S. with expansion to other markets planned for 2018 and beyond, pending country-specific regulations.

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Whistleblower lawsuit against Indian-American founded eClinicalWorks settles for $155 million

Jun 1, 2017 0

WESTBOROUGH, MA.– A whistleblower represented by law firm of Phillips & Cohen LLP provided key information to the government that led to eClinicalWorks (eCW ) settlement of civil fraud and kickback charges for $155 million, Phillips & Cohen LLP said in a statement.

eClinicalWorks, founded and headed by Girish Navani, is a privately held healthcare IT solutions firm. Based in Westborough, MA, the company is second largest in the country for e-prescribing.  eClinicalWorks has additional offices in Austin, New York City, Chicago, California, Georgia, London, India, and Dubai. Recently, eClinical was ranked 26th largest private companies in Massachusetts, with 2016 revenue of $444.17 million.

The government’s settlement agreement holds eCW and eCW’s founders and executives Girish Navani, Dr. Rajesh Dharampuriya, and Mahesh Navani liable for payment.  The government today also announced it has reached separate settlements with three eClinicalWorks employees, the statement said.

Girish Navani (Photo courtesy: New York Times)

Navani could not be reached for comment, but Politico reported that eCW  issued a news release in which it denied any wrongdoing. It said the claims settled by the agreement “are allegations only and there has been no determination of liability,” Politico reported. The company decided to settle only to avoid the cost and uncertainty of protracted litigation, it said.

“We are pleased to put this matter behind us and concentrate all of our efforts on our customers and continued innovations to enhance patient care delivery,” Politico quoted Chief Operating Officer Mahesh Navani as saying in the release.

“This is a ground-breaking case,” Colette G. Matzzie, a whistleblower attorney and partner at Phillips & Cohen said in the statement. “It is the first time that the government has held an electronic health records vendor accountable for failing to meet federal standards designed to ensure patient safety and quality patient care.”

The settlement is a “first” in two other ways: (1) An electronic health records (EHR) vendor is being held accountable for the truthfulness and accuracy of representations made when seeking government certification of its electronic health records system; and (2) The government applied the federal Anti-Kickback Statute (AKS) law to the promotion and sale of EHR systems, the statement said.

The whistleblower, Brendan Delaney, was a New York City employee implementing eClinicalWorks EHR system at Rikers Island for prisoner healthcare when he first became aware of numerous software problems that he alleged put patients at risk.

The government’s complaint joining the “qui tam” (whistleblower) lawsuit, which was filed in 2015, alleged that eClinicalWorks:

  • Falsely certified that its EHR met all government criteria
  • Failed to adequately test software before it was released
  • Failed to correct critical and urgent problems and bugs in the software “for months and even years.”
  • Failed to ensure data portability and audit log requirements
  • Failed to reliably record laboratory and diagnostic imaging orders
  • Paid kickbacks totaling at least $392,000 to influential customers to recommend eClinicalWorks products to prospective customers and other kickbacks in the form of “consulting” and “speaker” fees

“Accurate and reliable electronic health records are essential to good patient care and safety,” said Matzzie. “The most important outcome of the case is that multiple steps have been taken to alert eClinicalWorks customers, so patients now are better protected.”

Both the government and the whistleblower alleged that eClinicalWorks falsely represented to customers that its EHR system complied with federal requirements known as “Meaningful Use” rules.

During the government’s investigation of Delaney’s allegations, eClinicalWorks sent out in 2016 a series of advisories to customers, educating them on potential patient safety risks related to use of its HER

“Brendan Delaney worked tirelessly to document and track the EHR problems,” said Larry Zoglin, Of Counsel to Phillips & Cohen. “He felt a responsibility to the community at large to get the problems fixed.”

Delaney has worked as a consultant on EHR systems for various hospitals and healthcare providers since he left employment with the City of New York in 2011.

“I was profoundly saddened and disappointed by the indifference of senior health department officials and investigators for New York City when I provided detailed information about serious flaws in the EHR software that could endanger patients,” Delaney said. “I am grateful that Phillips & Cohen and federal government attorneys recognized the seriousness of my charges and dug into the matter quickly and thoroughly.”

“The government attorneys and investigators who worked on this case were single-minded in their efforts to protect patients and recover funds for taxpayers,” Matzzie said. “I want to commend the US Department of Justice, the US Attorney’s Office for the District of Vermont and the US Department of Health and Human Services.  Assistant US Attorney Owen Foster’s perseverance and efforts, in particular, were a big reason this case was successful.”

Former US Attorney Tristram J. Coffin and Eric Poehlmann of Downs Rachlin Martin PLLC served as local counsel in the case.

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