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World Bank bars deals with two more Indian firms
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by Sanjay Jha | January 12, 2009 at 03:26 am
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Indian government has barely recovered from the jolt it received in the wake of Satyam fiasco and now the world bank's latest action of banning two more big IT companies will question the credibility of Indian corporate governance. India's third largest outsourcing company Wipro has been blacklisted from bidding for contracts by World bank.
Satyam scandal has questioned the Indian corporate governance regimes and government is worried about global image.
Stocks of IT companies, including Wipro and Megasoft, took a beating at the bourses after it was revealed today that the two firms were barred from doing businesses with the World Bank.
Shares of Wipro Technologies and Megasoft were trading in the negative zone and registered losses up to 13 per cent and 12 per cent, respectively on the Mumbai Stock Exchange.
Two Indian companies have been barred from dealing with the World Bank over allegations of improper payments, the organisation said.
The companies involved are India's third-largest software firm Wipro Technologies and a subsidiary of technology outfit Megasoft India, the global financial body said in a statement on its website Sunday.
Wipro is accused of "providing improper benefits to (World) Bank staff" while Megasoft is said to have been involved in "a joint venture with Bank staff while also conducting business with the Bank."
The announcement came as India's IT sector reeled from revelations of a massive false accounting scandal at the country's fourth-largest software exporter Satyam Computers, which has seen its chairman arrested.
"We decided to disclose these names, as after the whole Satyam fiasco, transparency relating to global firms would benefit," a World Bank spokesman in New Delhi told AFP by telephone.
In December, the World Bank barred Satyam from doing business with it for eight years over "improper benefits" paid to World Bank staff.
"Satyam also failed to maintain documentation to support fees charged for its subcontractors," it added.
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Most RecentMost Recommended Comments (3)
at 04:04 on January 12th, 2009
It looks as if India's IT have a few more problem then previously believed.
I do hope that this can soon be cleared up to avoid a major down fall of the IT sector.
at 04:35 on January 12th, 2009
So we should be ready for another bubble burst.What is going in IT balance sheet.It is like they all were great only on paper even that was fake.
at 04:41 on January 12th, 2009
An Indian journalist gives a very interesting cultural analysis about the Satyam scandal : http://blogs.lemagit.fr/2009/01/12/satyam-case-and-the-dhritrashtra-syndrome/