Now its Wipro's Turn:Banned from World Bank contracts for four years

The reputation of India's IT services industry took another blow today after it emerged that Wipro has been barred from working for the World Bank, less than a month after Satyam Computer Services was blacklisted by the institution.

Following revised disclosure policies, the World Bank hs revealed that in June 2007 Wipro was banned from contesting direct contracts for four years after "providing improper benefits to Bank staff". Another Indian firm, Megasoft Consultants, has also been bared by the bank.

Wipro was blacklisted after offering World Bank staff shares in connection with its initial public offering (IPO) of American Depository Shares (ADS) in the US in 2000.

Wipro says its representatives offered the World Bank, through its chief information officer (CIO) and a senior staff, participation in the programme and they directed this offer to members of their family and friends.

This led to World Bank staff and their families buying 1750 shares for around $72,000at the IPO price.

The vendor says that, to date, its revenue from the World Bank is "insignificant" and the ban will "not adversely affect our business".

But this did not stop its share price falling by up to 12% on the Bombay Stock Exchange in morning trading.

Megasoft Consultants has also received a four year ban for "participating in a joint venture with Bank staff while also conducting business with the Bank".

News of the Wipro and Megasoft bans comes less than a month after it emerged that Satyam had been barred from World Bank contracts for eight years for "providing improper benefits to Bank staff and failing to maintain documentation to support fees charged for its subcontractors".