Here is another dampener to the Indian IT sector. The World Bank on Sunday blacklisted three IT firms which includes Satyam Computer Services, Wipro Technologies and an unknown IT company Megasoft Consultants.
The Bank said the move is in line with its disclosure practices for companies involved in wrongdoing that work on development projects financed by the World Bank and those that provide goods and services directly to the institution.
"This change was made in the interest of fairness and transparency," the Washington-based lender said in a statement, reports Reuters.
Until now, the World Bank has only published the names of debarred companies involved in Bank-financed projects, but has not listed blacklisted firms that receive direct contracts from the institution under its corporate procurement program.
"There are currently three companies that have been debarred along with their affiliates under the Bank Group's corporate procurement program," the Bank said.
It said it debarred Satyam Computer Services, India's fourth-largest software company, for eight years in September 2008, and Wipro Technologies, India's No. 3 software company, for four years in June 2007 both for "improper benefits to bank staff".
In addition, it said it had also barred India's Megasoft Consultants for four years in December 2007 for "participating in a joint venture with Bank staff while conducting business with the Bank".
All three companies were involved in different contracts and their debarments are not related.
The World Bank has long been under pressure to step up its fight again fraud and corruption within the institution and in projects it finances in developing countries.
Satyam's chairman and founder Ramalinga Raju resigned last week after revealing years of accounting fraud in India's biggest corporate fraud. Raju admitted last week that about $1 billion, or 94 percent of the cash on the company's books was fictitious.
The World Bank acknowledged only in December it had debarred Satyam following press reports that the company had been blacklisted three months earlier for "improper benefits" given to Bank officials.
In Mumbai, Wipro Ltd said in a statement its revenues from the World Bank were insignificant and the decision by the Bank to bar it would not affect business and earnings.
Shares in Wipro fell more than 12 percent after the World Bank said it had barred the company from its direct contracts.