Miseries continue to mount for Indias IT sector. As if Satyams plight was not enough for the cash-rich sector,another IT giant Azim Premji-led Wipro has been barred by the World Bank from doing business with it for offering illegal gratification to its staff. The countrys third largest software exporter was followed by Megasoft in earning the banks ire.
Wipro has been barred for four years from June 2007 for providing improper benefits to bank staff, the bank said in a statement. Megasoft too has been barred for the same period starting December 2007 for participating in a joint venture with World Bank staff while also conducting business with the bank, the World Bank,also known as the International Bank for Reconstruction and Development,said.
The World Bank approached us in 2007 seeking details about Megasoft China Operations and we gave them all details.We had by then even shut down our China operations. They objected to (our) having a joint venture with an ex-employee of the World Bank and chose to debar us on (those grounds), Megasoft said.
Maintaining that the debarment would not adversely affect its business and results of operations,Wipro said its representatives had in 2000 offered the World Bank,through its chief information officer and senior staff,participation in a directed share programme. Under this,World Bank staff were offered American depository shares of Wipro at IPO price. However,the bank determined in June 2007 the company would be ineligible for the international lenders direct contracts up to 2011,citing a conflict of interest policy.
Seemingly unfazed,Wipro said,To date,Wipros revenue from World Bank is insignificant. Our inability to get future business from World Bank will not adversely affect our business and results of operations. Megasoft too said that the debarment will not have any revenue implication for the company.
Non-IT vendors Nestor Pharma and Gap International and an individual Surendra Singh were the other Indian entities to have faced debarment action by the World Bank. In the list of ineligible firms released by the bank,over a 100 companies or individuals some of Indian origin have been barred temporarily or life. The list includes Gurpreet Singh Malik,Vikram Deepak Gursahaney,Kamal Sharda and Sharda Impex (UK Ltd) in Nigeria,as well as Labh Singh Gill,Labh Universal,Pradeep Menon,Shivshanker Pre Nair and Pradeep S Nair in the UK and Mandeep S Sandhu in the US.
The UK and Indonesia account for a significant number of debarred entities,while a number of entities debarred are from Sweden,Nigeria and the US.