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IT major Satyam computers is embroiled in controversy after the debacle of investing in own parent company.This move to save the parent construction company have been highly criticized heavily by the analyst an corporate governance lobby.successively Satyam withdrawn from its previous move.
The World Bank has barred Satyam, its top computer software services provider, from conducting any business with it
for eight years. The ban comes at a time when the company is trying hard to patch up with shareholders over prickly corporate governance issues.
The World Bank debarment, said to be the harshest that the multilateral agency has imposed on any company since 2004, was meted out for "improper benefits to bank staff" and "lack of documentation on invoices". World Bank officials in India also confirmed that Satyam has been banned for eight years.
The World Bank's revelation of the ban on Satyam comes at the most unfortunate moment. Last week, Sebi also announced that it would investigate Satyam for its aborted $1.6-billion deal with two companies-Maytas Infrastructure and Maytas Properties. Satyam chairman Ramalinga Raju is also the primary shareholder in the two Maytas companies. The company was forced to call off the deal after shareholders dumped the stock on both Indian and overseas markets. However, the damage was done and many research reports have put a "sell" on the stock.
The latest World Bank news is sure to add to the selling pressure. Satyam's share price shed 13.6% on Tuesday to close at Rs 140.40, its lowest in more than four-and-a-half years. In New York, Satyam ADRs were 16.5% lower at $6.90 in early trade. In all, in the Indian markets, the share has lost 28% since last week when it announced the deal with Maytas companies.
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UPDATE: Days after the World bank announced that it had debarred for eight years Satyam Computer Services from doing any business with it, the
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IT major has demanded an apology from the Bretton Woods-twin for making "inappropriate" statements.
Demanding that the World Bank immediately withdraw its statements, Satyam Computer wanted "it (World Bank) to issue a new statement apologising to Satyam for the harm done to the company due to the Bank's actions and that it provide Satyam with a full explanation of the circumstances related to the Bank's inappropriate statements."
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