New Delhi: Giving some hope to crisis-ridden Satyam, the World Bank has said it could review the eight-year ban imposed on the company provided the software exporter takes “corrective action”.
A World Bank official said Satyam has to show it has again become a responsible vendor to do business with, when asked whether the multilateral lending agency would relax the ban on the software exporter.
The World Bank banned Satyam Computer Services for eight years in 2008 for providing “improper benefits” to Bank staff and for failing to maintain records relating to fees charged for sub-contractors.
Satyam has a strong case for a review of the ban since its old board and management have been changed after its disgraced founder chairman B. Ramalinga Raju admitted to fudging accounts to the tune of Rs7,800 crore.
The World Bank’s guidelines for vendors have provisions for relaxing or scrapping bans on entities on fulfilling certain conditions including “(bona fide) change in ownership or management”.
Following the disclosure of the fraud by Raju, the government superseded the erstwhile board of Satyam, replacing it with one having its nominees.
The present board, headed by Nasscom past president Kiran Karnik, has taken steps to revive the company including appointing a new chief executive officer.
The new board is also exploring the option of selling the software company. Several leading companies including Larsen & Toubro, B K Modi’s Spice Corp and Tech Mahindra have reportedly expressed interest in acquiring Satyam.
The World Bank had banned Satyam in September 2008 from doing any business with it but the debarment was made public in December.
“Satyam was declared ineligible for contracts (because of) providing improper benefits to Bank staff and for failing to maintain documentation to support fees charged for its sub-contractors,” the World Bank had said in a statement in December.
In addition to Satyam, two other Indian entities, Wipro and Megasoft, were also debarred by the World Bank, though for different reasons.