World Bank blacklist two Indian pharma companies for ''collusive'' practices

17 July 2007

Mumbai: The World Bank has declared two Indian pharmaceutical firms, Nestor Pharmaceuticals Ltd (Nestor) and Pure Pharma Ltd (Pure Pharma), ineligible for contracts financed by it as the two have allegedly indulged in collusive practices.

It barred Nestor, which also has a manufacturing unit in Britain, from doing business with the World Bank for three years and Pharma for one year, the bank said in a statement.

Both firms were found to have engaged in collusive practices in connection with the World Bank-financed Reproductive and Child Health Project (RCH-I) in India.

Investigations found the firms guilty of impropriety in procurement of pharmaceuticals under the RCH-I project, following which the bank''s sanctions committee recommended barring the two from doing further business.

"The sanctions board''s decisions were based on evidence from an investigation by the World Bank''s Department of Institutional Integrity (INT) into allegations of impropriety in the procurement of pharmaceuticals under the RCH I project," the sanctions committee said in a statement.

The case had prompted former bank president Paul Wolfowitz to halt loans to India''s health sector in 2006 until improvements were made to the country''s procurement methods. But his action sparked tensions with the Indian government and a wider feud between him and bank shareholders over the bank''s role in tackling corruption.