After Satyam, another major Indian IT services provider – Wipro – now stands disgraced.
The World Bank has banned Bangalore-based Wipro for four years from receiving direct contracts from the Bank Group under its corporate procurement program.
On its web site, the World Bank has cited Wipro for providing improper benefits to the bank’s staff.
The ban on Wipro is from June 2007 through June 2011.
Wipro has not disclosed the World Bank ban until now although the bank’s action against the company was taken in June 2007.
Putting a brave face on the humiliating public disclosure of the World Bank ban, Wipro claimed that to date its revenue from the Bank is insignificant:
Our inability to get future business from World Bank will not adversely affect our business and results of operations.
Wipro acknowledged that in 2000 in connection with its Initial Public Offering of American Depository Shares in the U.S., it offered the World Bank, through its Chief Information Officer and a senior staff, participation in the program and they directed this offer to members of their family and friends. The aggregate number of shares purchased by them is said to be 1,750 for about $72,000 at the IPO price.
Wipro claimed that all participants in the program had signed a conflict of interest statement that their purchase did not violate any ethics or conflict of interest policies of their company.
Wipro has not disclosed the identities of other clients to whom it offered shares at the IPO price.
Nor did Wipro explain why it had not disclosed the ban for so long.
While the World Bank ban is a black mark against Wipro, it does not rise to the level of accounting fraud confessed to by Satyam’s former Chairman B.Ramalinga Raju.
Wipro shares fell 9.3% to Rs 227.35 in India following disclosure of the World Bank ban.
By the way, Satyam and Megasoft Consultants have also been banned by the World Bank for varying periods.
Related Stories
What Else is Wipro Hiding?
Wipro Banned for Bribing World Bank Staff added by SearchIndia.com on
View all posts by SearchIndia.com →
Do you have more info this ? .
…if shares have been purchased at IPO price …how is that a Bribe?….Have these World Bank officials (family & Friends ) jumped the queue and got shares ? – which otherwise they might have not got
SearchIndia.com Responds:
1. A share allotment program directed to a small group of people only, particularly people you do business with and their families & friends is not kosher.
2. You write above: …if shares have been purchased at IPO price …how is that a Bribe?….
Remember it was 2000 and there was usually a significant spike in the share price as the shares started trading on the exchanges. The IPO price was usually much lower and there was in most cases a good pop in prices once the shares started trading.
3. If it were a minor transgression, the World Bank wouldn’t have banned Wipro for 4 years citing Providing Improper benefits to Bank staff.