scorecardresearch
Monday, Dec 05, 2022
Premium

Satyam barred from World Bank business

Satyam Computer Services Ltd was barred from business with the World Bank for eight years, dealing a setback to the company just a week after it dropped a deal that upset investors.

Satyam Computer Services Ltd was barred from business with the World Bank for eight years, dealing a setback to the company just a week after it dropped a deal that upset investors.

Satyam’s shares have tumbled 28 per cent since it said last week it would pay $1.6 billion for two infrastructure firms in which the management held stakes and then quickly dropped the plan.

The stock shed a further 13.6 per cent on Tuesday to its lowest in more than four-and-a-half years on a media report, later confirmed, that it had been declared ineligible for direct contracts with the World Bank from September.

The World Bank said in a statement its decision followed a temporary suspension in February.

Subscriber Only Stories
ExplainSpeaking | What the RBI will do this week and whyPremium
Hardik, Alpesh, Jignesh: Young guns caught in keen ‘battles of prestige’ ...Premium
Pension bill exceeded salary & wages  spending for Centre, 3 states: ...Premium
Digital lending: No clarity, awaiting RBI response, say bank & fintechsPremium

Satyam was declared ineligible for contracts for providing improper benefits to Bank staff and for failing to maintain documentation to support fees charged for its subcontractors, it said.

Reacting to reports in the US media on charges of data theft, a company spokesperson said that they were aware of the reports but it was the company’s policy not to comment on client relations. “We have seen the reports. Satyam has a policy not to comment on or discuss client relations,” a spokesperson said today.

A Fox News report said Satyam was straying badly across the bank’s ethical warning lines. Quoting sources, the report said that one of the worst breaches apparently occurred last April in the network of the bank’s super-sensitive treasury unit. “…bank investigators had discovered that spy software had been covertly installed on workstations inside the bank’s Washington headquarters allegedly by one or more contractors from Satyam,” Fox News said. According to the report, Robert Zoellick reportedly told his deputies, “I want them off the premises now.” The report pointed out that A World Bank official denied that Satyam was behind any of the bank’s security breaches: “I am not in a position to tell you,” adding that “we’re confident” it wasn’t Satyam.

Advertisement

The company may try to placate shareholders through a share buyback, which is to be considered at a board meeting early next week, but analysts said investors would be nervous that the World Bank ban might put off other customers.

(With inputs from Reuters, PTI)

First published on: 24-12-2008 at 01:09:50 am
Next Story

Outlook optimistic but cautious, says FinMin midterm review

Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
Advertisement
close