World Bank bans Satyam for 8 years

Step taken owing to data theft and paying bribes to World Bank staff

The Satyam saga is getting murkier by the day, with more questions being raised on its corporate governance standards. The World Bank on Tuesday confirmed an earlier report that it has barred Satyam Computer Services from doing business with it for eight years, starting September this year, due to data theft and paying bribes to its staff.

However, it’s not clear if the company’s independent directors knew about these allegations. Two independent directors said that the Satyam management had merely informed the board that its contract with the World Bank had ended, without referring to the fact that it has been barred from doing business with the Bank for eight years. The World Bank has been an important client for Satyam, India’s fourth-largest software exporter. The multilateral agency had signed $100-million billing per annum contract.

“The World Bank had never complained or informed us... Satyam’s contract with the World Bank had come up for discussions in an earlier board meeting. We were told that as a matter of policy, the World Bank does not renew contracts with the same vendor for more than five years,” said TR Prasad, independent director on the Satyam Board. This was reconfirmed by another independent board member VS Raju. “Yes, we have banned Satyam from doing business with us,” the World Bank spokesperson, Sudip Mazumder, said from New Delhi.

Source: The Economic Times

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