Monday, Dec 25, 2023

US surveillance giant’s network of operations has subsidiaries in India

Cyprus data shows details of Verint in India, including Cognyte which was under scanner for ‘targeting dissidents’

Cyprus Confidential US surveillance giant India officeThe Verint office in Aerocity near Delhi airport.

Among the scores of firms under the spotlight for their global money flows revealed by the Cyprus Confidential investigation, is US surveillance giant Verint Systems with a network of operations that include subsidiaries in India as well.

Cyprus Confidential is the offshore investigation conducted by the International Consortium of Investigative Journalists (ICIJ) and 65 media partners, including The Indian Express, scrutinizing 3.6 million leaked documents from six Cyprus-based offshore service providers.

Data from one of the service providers, Cryptodirect, gives a rare glimpse into operations of Verint Systems headquartered in Melville, New York, and with a network of offices worldwide.


In 2021, Verint spun off a new company called Cognyte, solely to cater to Governments, and has since faced criticism for allegedly selling spyware to “repressive regimes.”

Official Israel company registration records show a trail of firms changing their names: Efrat Infomedia Ltd changed to Comverse Infosys Ltd; and then to Verint Systems Ltd and, finally, to Cognyte Technologies Israel Ltd in 2020.

Festive offer

There are several structure charts of the Verint/Cognyte group that are among the Cyprus Confidential dataset which show the cross-holdings of the group companies including other Cyprus-based firms, Permadeal Limited and Almoglow. The last company, records show, was set up for absorbing the assets and liabilities of another company, UTX Technologies, and was wound up after a year and Permadeal was set up in Cyprus also for “holding of investments.”

On November 16, 2020, records show, Verint Systems Ltd spun off Cognyte Technologies Israel Ltd – this was announced on February 1, 2021.


In December that year, Cognyte was at the centre of a controversy when Meta published a report on the “surveillance-for-hire” industry and named Cognyte as one of seven companies it called “cyber mercenaries.”

Meta alleged that while these companies claim their services target only criminals and terrorists, an investigation by its cyber espionage unit found that their targeting was much more indiscriminate: it included “journalists, dissidents, critics of authoritarian regimes, families of opposition members and human rights activists.”


Meta raised red flag

Cognyte came under scrutiny and faces legal action from shareholders after Meta alleged, in December 2021, that it was one of seven ‘cyber mercenaries’ that indiscriminately target journalists, dissidents and critics of authoritarian regimes.

Meta claimed these seven surveillance providers were based in countries like India, Israel and China, and that it had disrupted their activities and banned them from using their services.


Meta alleged that Cognyte “sells access… which enables managing fake accounts across social media platforms including Facebook, Twitter, YouTube and other websites to social-engineer and collect data.’’

Following the Meta report, Cognyte faced a slew of legal challenges in the form of class actions from its shareholders, who alleged that the company had withheld information and provided reconnaissance tools and services that violated community standards exposing the company to significant financial and reputational risk.

In March this year, The Financial Times (London) had reported that following the Pegasus scandal — revelations that some Indians were on the potential target list of Israeli firm NSO’s Pegasus spyware — India was looking for “rival” spyware and was “seeking to spend up to $120 million through new spyware contracts.” The report specifically mentioned Cognyte as likely to be in the running.

The Government had denied any purchase of NSO’s Pegasus software for surveillance and on August 25, 2022, a Supreme Court-appointed committee stated they had found no conclusive evidence on use of spyware in phones examined. But then Chief Justice N V Ramana also noted that the Government “had not co-operated”with the expert panel.

Cyprus Confidential data, including filings with the US market regulator in 2020, show Verint has listed as many as 69 subsidiary companies worldwide, including four in India.


These are: Verint CES India Private Limited; Verint Cyber Intelligence Solutions India Private Limited; Verint Systems (India) Private Ltd; and Witness Systems Software (India) Private Limited. Following the 2021 “spin-off of Cognyte globally, Cognyte Analytics India became part of the company’s presence in India.

In New Delhi, the listed address of Cognyte Analytics India Private Limited in Bhikaji Cama Place is the office of its chartered accountants marking the company’s “registered address.” The office of Verint CES India Private Limited is in Aerocity near Delhi airport, with a staff of around 50.


In response to questions, the company’s representatives said that Cognyte was no longer a part of the present company, Verint CES India Private Limited.

A scrutiny of the balance sheets of these Indian subsidiaries shows that a substantial share of their revenue comes from the group’s foreign subsidiaries, in this case, located in Israel and Hong Kong.


For instance, during the year ended March 2021, Verint CES India Pvt Ltd posted a total revenue of Rs 128.21 crore and had a net profit of Rs 8.05 crore.

In the same year, revenue from services rendered by it to Verint Americas Inc, USA — its holding company and thus a related party— amounted to Rs 60.61 crore, just under half of its total revenue for the year.

Moreover, Verint CES India also had a financial transactions with a subsidiary in Israel — Cognyte Technologies Israel Limited. While Verint CES India purchased goods worth Rs 21.84 crore and tangible assets worth Rs 15.96 lakh from Cognyte Technologies Israel, it earned revenue from this Israeli subsidiary amounting to Rs 3.32 crore for offering services.

In another related party transaction, Verint CES India earned revenues of Rs 2.02 crore from another fellow subsidiary in Hong Kong — Verint Systems (Asia Pacific) Ltd, HK for service export.

As for Cognyte Analytics India Pvt Ltd, in the year ended March 2023, the company saw its total revenue decline to Rs 41.6 crore. In the year ended March 2022, it stood at Rs 55 crore. The net profit also declined to Rs 6.13 crore in March 2022 and then to Rs 3.04 crore in March 2023.

A scrutiny of the most recent financial statement for another Indian subsidiary, Verint Systems (India) Private Limited, for the year ending March 2022 shows that the company has had several run-ins with the Income Tax Department in India. Balance sheets show that it has penalty proceedings in progress with Rs 32 lakh due for the year 2010-11. The most recent “disputed” amount is for the year 2017-18, for alleged “disallowance of expenses” totalling Rs 4.8 crore.

First published on: 24-12-2023 at 04:04 IST
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