WASHINGTON: India’s third largest software exporter Wipro joined bribery-tainted Satyam Computer Services in a club of companies barred for four years from doing business with the World Bank on charges of offering improper benefits to the Bank staff.
Wipro Technologies was followed by Megasoft, the third Indian software vendor to have attracted the Bank’s ire, while non-IT vendors Nestor Pharmaceuticals and Gap International and an individual Surendra Singh were the other Indian entities to have faced debarment action by the Bank. — PTI
Our Bangalore bureau adds:
Wipro Technologies, the global IT services arm of Wipro, announced on Monday that it is ‘ineligible’ to bid for ‘direct contracts’ from the World Bank between June 2007 and 2011.
Wipro admitted that it had issued 1,750 shares to employees and ‘clients’ for $72,000 (Rs. 35 lakh) during its initial public offer for American Depository Shares (ADS) in 2000.
The company claimed this was “a commonly utilised” method of allocation of shares, approved by the U.S. Securities and Exchange Commission (SEC).
“Wipro representatives,” the statement said, “offered the World Bank, through its Chief Information Officer (CIO) and a senior staff, participation in the program and they directed this offer to members of their family and friends.”
Asked why the company had not made the announcement earlier, Girish Paranjpe, Joint CEO and board member, told The Hindu that “We made the allotment in line with practices prevailing then (2000).
He said the number of shares offered was “small and carried several restrictions.” “We had not done anything wrong,” he added.
Our Hyderabad bureau adds:
Megasoft, which was debarred by the World Bank, said “there is no material effect on the company due to the action.”
Megasoft Managing Director and CEO G. V. Kumar said the company had no business from the Bank since 2004 and hence there was no financial impact on it due to the announcement.
He explained that the Bank approached Megasoft in 2007 seeking details about the [company’s] China operations and “we gave them all details.
But, the Bank had objection to Megasoft having a joint venture with its ex-employee and chose to debar the company on that ground, he said adding that the company maintained high levels of corporate governance and made disclosures of all operations, including about Megasoft China.