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Three Indian outsourcers barred by World Bank

Karl Flinders

Indian Suppliers Wipro, Megasoft Consultantsand Satyam have beenbarred by the World Bank.

The World Bank published a list of three Indian IT service providers barred from selling to it yesterday.

Indian IT services providers Wipro, Megasoft Consultants and Satyamare currently banned from doing direct business with the World Bank because of conflicts of interest.

On 25 December 2008 the World Bank barred Satyam, the company at the centre of a $1bn accounting fraud, for eight years for "providing improper benefits to World Bank staff and failing to maintain documentation to support fees charged for its subcontractors," said the World Bank.

The Wipro ban was first placed in June 2007 and will continue until at least 2011. It was barred for providing improper benefits to bank staff. World Bank employees and family and friends bought 1,750 Wipro shares for about $72,000, said Wipro in a statement.

Megasoft Consultants was banned for four years in December 2007 for "participating in a joint venture with bank staff while also conducting business with the bank."

The transparency of the Indian IT service industry is being called into question following news of a huge internal fraud. Satyam Chairman B Ramalinga Raju, was arrested by Indian police on Friday after admitting that he had fiddled the company's books for several years. The revelation came in a letter to the company last week, in which Raju offered his resignation and confessed to inflating the company's financial figures.

Global customers of Indian IT suppliers are questioning the transparency of their suppliers following last week's scandal.

"The World Bank Group has decided to make public the names of all companies that have been debarred from receiving direct contracts from the Bank Group under its corporate procurement program. This change was made in the interest of fairness and transparency," said a World bank statement.


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