FRONT PAGE | Tuesday, January 13, 2009 | Email | Print | 
Now, World Bank blacklists Wipro, Megasoft
S Rajagopalan | Washington
It’s not Satyam alone that has been debarred by the World Bank. The Washington-based multilateral financial institution on Monday disclosed that it has also blacklisted two other major Indian IT firms — Wipro Technologies and Megasoft Consultants.
In a public listing of the debarred companies and individuals, the World Bank also revealed the blacklisting of two other Indian entities — Nestor Pharmaceuticals and Gap International — and an individual, Surendra Singh.
Wipro and Megasoft have been debarred for four years, while Satyam has been banished for eight years.
Like Satyam, Wipro has been accused of providing improper benefits to World Bank staff, while Megasoft has been charged with participating in a joint venture with Bank staff even while conducting business with the Bank. All three companies were involved in different contracts and their debarments are not related.
It turns out that the action against Wipro became effective in June 2007 and that against Megasoft in December 2007.
The debarring of New Delhi-based Nestor took place in July 2007 and is effective for three years. The action against Gap International and Surendra Singh is “permanent” and was taken back in April 2001.
A World Bank statement said that from now on it will make public the names of all the companies that have been debarred from receiving direct contracts from the Bank group under its corporate procurement programme.
“This change was made in the interest of fairness and transparency,” the Bank said, adding that henceforth, it would publicly list the companies debarred from receiving direct contracts from the Bank Group under its corporate procurement programme.
The Bank said the move aligns its disclosure practices for companies involved in wrongdoing that work on development projects financed by the World Bank and those that provide goods and services directly to the institution.
For quite some time now, the World Bank has been under pressure to step up its fight again fraud and corruption within the institution and in projects it finances in developing countries.
Only last month, after a series of investigative reports by Fox News, the Bank came up with the disclosure of its debarring of Satyam for eight years. The blacklisting had actually taken place three months earlier.
Meanwhile, Wipro said it did not see any major business impact due to the Bank action.
“We would not expect any significant impact adversely... financially.....Overall in any manner”, Wipro’s Chief Financial Officer Suresh Senapaty told PTI in
Bangalore. “The business that we did with the World Bank is very insignificant,” Senapaty said. “Since (the year) 2000, we did (a business) much less than one million in aggregate (with the World Bank)”.
Reacting to the World Bank’s action, Senapaty said the shares issued by Wipro in October 2000 was in pursuant to the Directed Share Programme (DSP) and as per the prospectus duly reviewed by the Securities and Exchange Commission. “We think we have followed the procedure as has been envisaged in our prospectus,” he said, according to PTI..On the possible business sentiment impact on the company, he said the Bangalore-headquartered firm communicated in a transparent manner and hoped that the media, analysts and investors would appreciate this. "It's better to communicate more than less."
Earlier in the day, Wipro said in connection with the revised disclosure policies, in June 2007 the World Bank determined Wipro to be ineligible to contest direct contracts from the World Bank for the period.
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