Satyam board were given contrary picture on World Bank ban

Satyam board were given contrary picture on World Bank ban
PTI
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First Published: Sun, Jan 18 2009. 03 50 PM IST
Updated: Sun, Jan 18 2009. 03 50 PM IST
New Delhi: Even after the World Bank imposed a ban on Satyam on charges of giving improper benefits to the lender’s employees, the IT company gave a contrary picture to its board and auditors on the action taken by the global bank.
The minutes of Satyam’s audit committee meeting, held on 17 October, 2008, revealed that the company’s management had termed the allegations made by the international lender as rumours and misinterpretation.
The World Bank made public in December last year the ban imposed on the IT firm from September.
The audit committee comprised board members, statutory auditors, global head of internal audit, among others.
In the audit committee meeting, one of the independent directors, Vinod Dham, had enquired about the World Bank issue to which the company’s then whole-time director Ram Mynampati said: “The company has been servicing them for the last 10 years and has won many accolades and appreciations from the World Bank.”
Last month, the World Bank had declared Satyam Computer ineligible to receive direct contract under corporate procurement programme for eight years, due to the IT firm’s failure to furnish proper documentation on fees charged for sub-contractors and for providing improper benefits to the bank’s 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 had said in a statement.
Mynampati further said that within two hours of the misreporting about the ban, “World Bank denied the rumours. The contract with World Bank ended in September 2008 and as per the policy of World Bank, it cannot continue beyond certain period... factored in the same in our guidance”.
Another director, Krishna Palepu, said despite the company’s “best performance on all fronts, the same is not being reflected in the stock performance” and he suggested a review “if the company is lacking in the communication front to the market.” After this, T R Prasad advised “to present the performance of the stock in comparison with BSE IT index.”
The World Bank’s decision was effective from September 2008 and prior to that Satyam was temporarily suspended in February. The Bank said it declared Satyam ineligible to receive direct contracts under its corporate procurement programme.
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First Published: Sun, Jan 18 2009. 03 50 PM IST
More Topics: Satyam | Audit | Mynampati | Board | World Bank |