Wipro banned / barred by World Bank
Wipro Ltd. India’s third-largest software exporter today disclosed that they were barred from working for the World Bank. Wipro’s disclosure, more than 18 months after the penalty was imposed, came after the World Bank decided to publish names of all companies that it barred from contracts.
Wipro share fell as much as 12 percent in Mumbai, the biggest decline in almost three months.
Bangalore-based Wipro said it was banned in 2007 for offering World Bank employees shares in its stock offer in the U.S. in 2000. Wipro is barred from World Bank contracts from June 2007 for four years, according to a statement on its Web site. The purchase didn’t violate any ethics or conflict of interest policies, Wipro said in an e-mailed statement. Revenue from the World Bank is “insignificant,” the company said, adding it did not anticipate the ban affecting other contracts. World Bank employees, their family and friends bought 1,750 Wipro shares for about $72,000 at the IPO price, Wipro said.
“Wipro representatives 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,” according to today’s statement.
Wipro Chief Financial Officer Suresh Senapaty was quoted as saying
“In light of the current developments, we decided it was better to disclose more rather than less…Wipro has offered stock to customers and employees of customers other than the World Bank.”
It is to be recalled that Satyam’s founder was arrested last weekend after admitting fraud in a scandal that has roiled equity markets and spurred tighter disclosure rules.
We are going to see more such disclosures (by other companies) in the present environment as the companies will make disclosures just to be sure they aren’t perceived to be lacking in transparency.
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