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World Bank puts Wipro unit on blacklist
By Muneeza Naqvi |
January 13, 2009, Tuesday
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Print Edition
Print Edition
A BUSINESS unit of Wipro Ltd has been blacklisted by the World Bank until 2011, the lender said yesterday, embroiling another top Indian outsourcing company in controversy.
The World Bank said Wipro's information technology services unit had been barred from getting direct business with the bank since June 2007, but was naming Wipro now 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."
Wipro Technologies was blacklisted for four years for "providing improper benefits to bank staff," a World Bank statement said. It gave no other details. Wipro denied any inappropriate conduct in a statement on its Website.
As part of the company's initial public offering in 2000 of United States-listed shares, Wipro offered stock to employees and clients including senior staff of the World Bank who then made the offer available to family and friends, it said.
Some US$72,000 worth of the shares were bought by these people but the purchases were defensible because all participants in the scheme to sell shares to employees and clients had signed statements saying they weren't violating ethics or conflict-of-interest policies, said Wipro. The company said its revenue from World Bank contracts was insignificant. "Our inability to get future business from the World Bank will not adversely affect our business and results of operations," it said.
The news comes at a time when India's information technology companies are struggling against a global slowdown and waning economic growth at home. India's IT firms derive 40 percent of their global revenue from financial services clients.
At least 2 million Indians work in the country's booming high-tech industry, which last year brought in an estimated US$40 billion.
The World Bank said Wipro's information technology services unit had been barred from getting direct business with the bank since June 2007, but was naming Wipro now 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."
Wipro Technologies was blacklisted for four years for "providing improper benefits to bank staff," a World Bank statement said. It gave no other details. Wipro denied any inappropriate conduct in a statement on its Website.
As part of the company's initial public offering in 2000 of United States-listed shares, Wipro offered stock to employees and clients including senior staff of the World Bank who then made the offer available to family and friends, it said.
Some US$72,000 worth of the shares were bought by these people but the purchases were defensible because all participants in the scheme to sell shares to employees and clients had signed statements saying they weren't violating ethics or conflict-of-interest policies, said Wipro. The company said its revenue from World Bank contracts was insignificant. "Our inability to get future business from the World Bank will not adversely affect our business and results of operations," it said.
The news comes at a time when India's information technology companies are struggling against a global slowdown and waning economic growth at home. India's IT firms derive 40 percent of their global revenue from financial services clients.
At least 2 million Indians work in the country's booming high-tech industry, which last year brought in an estimated US$40 billion.
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