World Bank hires TCS to do Satyam's work, Wipro sees red

Earlier, in December, the World Bank said it found a third Indian IT company, Satyam Computer Services, ineligible for direct contracts for a period of eight years, effective from September 2008, on grounds of bribery, fraud and business malpractice.

The blacklisted names were made public by the World Bank on Monday in the interest of fairness and transparency. The bans, the World Bank said, were imposed with respect to its corporate procurement program. The World Bank has debarred as many as 111 companies and individuals from across the world from doing business or bidding for its projects till date.

With 3 Indian IT companies in the World Bank's blacklist, a general gloom had fallen on India's IT industry, with rumors spreading that the World Bank was specifically targeting Indian IT companies. However, the latest news indicates that the World Bank is still keen on doing business with Indian technology outsourcers that have a strong record of corporate governance and transparency.

Meanwhile, Wipro has vehemently denied that the World Bank has barred it from bidding for direct contracts because it had done something "wrong or unethical." It also urged the media to restrain themselves from comparing its case with Satyam's.

"In 2000, as part of our initial public offering (IPO) of American Depository Shares (ADS) to our employees and clients in the US, our representatives made an offer to World Bank employees to purchase the shares at market price under the Securities and Exchange Commission approved Directed Share Programme (DSP). The World Bank, however, directed the offer to the family members and friends of its employees. Though they purchased 1750 shares for about $72,000 at the IPO price ($52.48), they signed a conflict of interest statement that purchasing the shares did not violate any ethics or conflict of interest policies. The programme objective was to involve employees and customers with the public offering to expand our recognition and brand. A majority of the shares sold under the DSP were allotted to our employees. [Later] The World Bank determined in June 2007 that Wipro would be ineligible to contest direct contracts from 2007-2011," Wipro said in a regulatory filing with the Bombay Stock Exchange on Monday, in line with the revised disclosure policies that mandate that the company must reveal its vendor status with the World Bank.

However, Wipro said that its cumulative revenues from the World Bank are less than a $1 million in the past 8 years. "Our inability to get future business from World Bank will not adversely affect our business and results of operations. To date, Wipro's revenue from the World Bank is insignificant," it added.