Wipro kept WB ban a secret
The Satyam storm is blowing out information that was, till now, locked in the closets of tech companies.
After last month's World Bank disclosure that it had banned Satyam for eight years on charges of bribery and lack of proper documentation of invoices, two more software companies revealed that they too were barred from working with the lending institution.
On Monday, Wipro and Megasoft Consultants Ltd said they were also on the bank's list of debarred companies. Wipro's shares fell 9.3% to Rs 227.35.
Wipro chairman Azim Premji fumed on Monday, as he summoned the top brass, seeking an explanation on the World Bank's charges.
Wipro's disclosure comes 18 months after the bank penalised it for allotting 1,750 shares worth $72,000 to its employees, their family and friends under its directed share program.
The shares were issued in 2000, when Wipro had come out with an initial public offering of American depository shares in the US.
The software company said it was "ineligible to contest direct contracts from the World Bank for 2007-2011."
Hyderabad-based Megasoft was blacklisted in December 2007 for four years for participating in a joint venture with the bank's employees.
Wipro chief financial officer Suresh Senapathy said his company had not come out the information earlier as the bank was an insignificant client with business of less than $1 million.
So why now? Senapathy said it was because of the bank's changed disclosure policy on January 11.
JP Morgan analysts Manoj Singla, Bhavin Shah and Nishit Jasani on Monday said disclosures like the World Bank's increase apprehension among investors against the backdrop of the Satyam fraud.
"It will be in the best interest of Indian IT companies to be prompt in disclosing price sensitive information to investors, given the nervousness post the Satyam debacle," the analysts said.
Megasoft managing director GV Kumar said his company was still learning on such matters.
Tags: Wipro , World Bank Ban
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