World Bank bans Wipro, three others

deepak pace

DJ_DEE
India's third largest IT services exporter Wipro dipped as much as 12 per cent in early trade today on the bourses, after the company said it is not eligible to bid for contracts with the World Bank till 2011.

Shares of Wipro Technologies skid over 12 per cent to touch its intra-day low of Rs 220 on the Bombay Stock Exchange, the scrip was trading at Rs 240.50 down 4.05 per cent on the bourse.
According to the revised disclosure policies, the company today disclosed its vendor status with the World Bank as per which the company said it is not eligible to contest direct contracts with the World Bank till 2011.
On the National Stock Exchange, the company's shares slipped 11.25 per cent to touch an intra-day low of Rs 222.70, from its previous days close.
In June 2007, the World Bank had determined the IT firm to be ineligible to contest direct contracts from the global lender for the period 2007-2011, citing conflict of interests, a Wipro spokesperson said.
Marketmen said investor sentiment was affected because of the disclosure. Though Wipro said its revenues from the World Bank were insignificant and the said decision would not adversely affect its business and results of operations, the move was a negative trigger for the company.
The company further said: “Our inability to get future business from World Bank will not adversely affect our business and results of operations.”
Meanwhile, during the day, Wipro joined bribery-tainted Satyam in a club of companies barred from doing business with the World Bank on the charges of offering improper benefits to the Bank staff.
Wipro was followed by Megasoft, the third Indian software vendor to have attracted the Bank’s ire, while non-IT vendors Nestor Pharmaceuticals and Gap International and an individual Surendra Singh were the other Indian entities to have faced debarment action by the Bank.
While Wipro was barred for four years beginning June 2007 for “providing improper benefits to Bank staff", Megasoft was barred for an identical period beginning December 2007 for “participating in a joint venture with Bank staff while also conducting business with the Bank,” the global lender said in a statement.
A Wipro statement 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, the Bank staff was offered american depository shares of Wipro at IPO price.
However, the Bank determined in June 2007 the company would be ineligible for the international lender's direct contracts up to 2011, citing a conflict of interest policy.
Wipro said: “Our inability to get future business from World Bank will not adversely affect our business and results of operations.” Megasoft, too, said the debarment would not have any revenue implication for the company. Earlier, Satyam, which was debarred for eight years beginning Sept 2008 on bribery charges, had demanded an apology for making public its name and withdrawal of "inappropriate" statement by the Bank. The Bank had refused to apologise
 
Top