No contract with Satyam

The World Bank said it has declared Satyam Computer ineligible for 8 years to receive direct contract under corporate procurement programme due to IT major’s failure to furnish proper documentation on fees charged for sub-contractors and for providing improper benefits to the Bank staff.

“Satyam was declared ineligible for contracts for providing improper benefits to Bank staff and for failing to maintain documentation to support fees charges for its sub-contractors,” the World Bank said.The Bank’s decision was effective from September this year and prior to that Satyam was temporarily suspended in February.

The statement also noted that there is no evidence that the Indian company was involved in malicious attacks on the Bank’s information systems.The development comes at a time when the company is facing a probe back home over an abortive acquisition deal involving two firms promoted by Satyam Chairman Ramalinga Raju’s family.

Satyam had announced a USD 1.6 billion deal to acquire two firms — Maytas Infra and Maytas Properties — promoted by Raju’s family and withdrew it within hours after shareholders’ dissent.This was followed by market regulator Securities and Exchange Board of India and the government saying that it would look into the matter.

The World Bank debarment — the harshest sanction the world’s largest anti-poverty agency has imposed on any company since 2004 — was meted out for “improper benefits to bank staff” and “lack of documentation on invoices,” said a Fox News report, quoting Robert Van Pulley, the top World Bank information security official.

Satyam has been barred from doing any business with the bank for eight years, a top World Bank official has admitted that Satyam — one of its technology vendors — was barred in February and the ban has already started in September.

“From 2003 through 2008… the World Bank paid Satyam hundreds of millions of dollars to write and maintain all the software used by the bank throughout its global information network, including its back-office operations. That involved overseeing data that ranges from accounting and personnel records to trust funds administered for many of the world’s richest nations.

“But at the same time, Satyam was straying badly across the bank’s ethical warning lines. In 2005, the bank’s chief information officer, Mohamed Muhsin, was ousted after being accused of improperly buying preferential stock options from Satyam, even as he awarded the firm major contracts.