Wipro among 111 global firms debarred by World Bank

13 January 2009

The World Bank has issued a ban on 111 firms and individuals, with several of these bans being permanent and non-revocable.

These 111 firms and individuals from around the globe including the EU and the US and have been blacklisted as suppliers or vendors for any World Bank funded project.

In contrast Satyam, Wipro and Megasoft had been barred for a limited period for supply of products and services to World Bank directly for one reason of the other.

While Satyam was a major IT services supplier to the World Bank and even operated a call centre in Chennai for the multilateral agency, besides setting up its intranet and undertaking several other projects, Wipro and Megasoft had a much smaller quantum of business - in fact Megasoft had not handled any World Bank work after 2004 -  and therefore being debarred by it has hardly impacted them financially.  Moreover, the actual debarment took place in 2007, while the ank has opted to publicise it only now.

Therefore, it seems the World Bank statement about Wipro and Magnasoft Consultant being debarred from its list of vendors appears to have been blown out of proportion and context, coming as it does in the wake of Satyam's debarment (See: Satyam barred from World Bank work for 8 years) and the subsequent disclosures by it spromoter of its books having ben fudged (See: Satyam's Raju admits to fraud and resigns) 

The fear that has been embedded in the minds of the Indian investor with regard to fraudulent happening in Satyam resulted in a kneejerk reaction to the World Bank statements and a sharp fall in the price of Wipro.