Satyam Computer banned for 8 years by World Bank

24 Dec 2008

World Bank has banned Satyam Computer for 8 years in February 2008 and the ban started from September 2008. The reasons for the ban have been noted as “improper benefits to bank staff” and “lack of documentation on invoices”. The comments were confirmed by World Bank’s acting Information Security Official.

 

Satyam Computer had been working for World Bank since 2003 through to 2008 to write and maintain all the software used by the bank throughout its global information network including back office operations. 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. The report alleges Former VP Mohamed Muhsin had secured contracts and purchase orders worth US$ 100 million to Satyam Computer in return for Satyam's stock options (ADR) at preferential prices. Satyam was 'suspended' in February 2008, declared a 'non-responsive vendor' and then 'made ineligible to be a bank corporate vendor' until the year 2016. 

 

This allegation comes on the back of serious corporate governance issues against the Chairman Mr Ramalinga Raju on the proposed acquisitions of Maytas Infra and Maytas Properties owned and controlled by the two sons of the Chairman.  While World Bank’s Indian office confirmed about ban on Satyam to PTI news, the company has not yet clarified on these lines. crackcrack
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