World Bank bans Satyam for 8 years

[Badrinath]

The fourth-largest Indian IT company Satyam Computer Services has been banned by World Bank says a Fox News report. The report quotes
a senior World Bank official admitting that Satyam has been barred from all business at the bank for eight years.

The World Bank debarment has been meted out for "improper benefits to bank staff" and "lack of documentation on invoices," according to Fox News report.

World Bank information security chief Robert Van Pulley admitted to the ban during a recent meeting with the officials of Government Accountability Project (GAP), a whistleblower protection organisation in the US, as per the report. The bank has handed over the case to the US Justice Department and the Treasury Department.

“The World Bank had never complained or informed us... Satyam’s contract with the World Bank had come up for discussions in an earlier board meeting. We were told that as a matter of policy, the World Bank does not renew contracts with the same vendor for more than five years,” said TR Prasad, independent director on the Satyam Board. This was reconfirmed by another independent board member VS Raju. “Yes, we have banned Satyam from doing business with us,” the World Bank spokesperson, Sudip Mazumder, told ET from New Delhi.

In October this year, Ram Mynampati, president (commercial and healthcare business) of Satyam Computer Services and a member of the Board, also said the World Bank, as a matter of policy, does not renew contracts with the same vendor. E-mail queries to two other directors, Vinod Dham and Krishna Palepu, remained unanswered at the time this story was written.

According to Fox reports the Satyam case had been turned over to the Justice Department in 2006 as well as to the US Treasury Department but no legal action against the company is known as yet.

World Bank's revelation couldn't have come at a worst time for Satyam. The company is already facing flak from investors on its decision to acquire Maytas' distressed real estate and infrastructure industries for $1.6 billion.

Source : Indiatimes

[Chandran12]

Satyam started providing IT services to the World Bank in 2003. Two years later, allegations of bribery surfaced. In 2007, an internal World Bank investigation found that former VP Mohamed Muhsin had secured contracts and purchase orders worth $100 million for the Indian firm in return for Satyam's stock options (ADRs) at preferential prices. After which Muhsin was banned permanently from the bank. However, Satyam was allowed to work for the bank till 2008