Wipro Blacklisted By World Bank

New Delhi – 13.01.09 – Even as the Indian IT industry is reeling with the impact of the Satyam’s loss of grace, another big blow has come with the revelation of World Bank blacklisting Wipro.

The third largest software services company of India, Wipro, has been blacklisted by the World Bank on the charges of following corrupt practices since July 2007.  Wipro has however not disclosed the four year ban that was imposed on it by the World Bank to its investors.

Revelation about Wipro came to light with the Monday statement by the World Bank making public names of all organizations and individuals banned by it for divergent periods.  “Wipro was one of the six companies and individuals debarred along with their affiliates under the Bank Group’s corporate procurement program”, disclosed World Bank sources.

The Bank said Wipro “provided improper benefits to Bank staff”, a reason similar to those causing the 8-year ban on Satyam Computer Services.

A senior Wipro official said that the charge relates to the allotment of around 1,750 shares worth approximately $72,000 to the employers of the World Bank.  The company provided such shares in its maiden offer on American depository shares in the year 2000. The shares were made available at issue prices.

“Wipro representatives offered the World Bank, through its chief information officer and a senior staff, participation in the (ADS) programme and they directed this offer to members of their family and friends,” the company sources declared in a statement.

“All participants in the program signed a conflict of interest statement that their purchase did not violate any ethics or conflict of interest policies of their company,” the Wipro official added, “to date, Wipro’s revenue from World Bank is insignificant.

Wipro is pessimistic about its future business prospects.  They insist that their inability to get future business from World Bank will not affect its business adversely.

Megasoft Ltd, Hyderabad, Nestor Pharmaceuticals, Gap International, and a person named Surendra Singh are the other four banned by the World Bank.

“We had no business from World Banks since 2004, and hence, the ban has no financial impact on the company”, says Megasoft management.

It remains to be seen how these companies, especially Wipro fare, after such ban by the World Bank.