New Delhi, Dec 24: World Bank has imposed an eight year long ban on top Computer Software Services Provider, Satyam from conducting any business. The Bank's debarment, is said to be the harshest that the multilateral agency has imposed on any company since 2004. the ban was meted out for 'improper benefits to bank staff' and 'lack of documentation on invoices'. World Bank officials in India also confirmed the ban imposed on Satyam.
Last week, SEBI also announced that it would investigate Satyam for its aborted $1.6-billion deal with two companies-Maytas Infrastructure and Maytas Properties. Satyam chairman Ramalinga Raju is also the primary shareholder in the two Maytas companies. The company was forced to call off the deal after shareholders dumped the stock on both Indian and overseas markets.
The latest World Bank news has shed the share price of Satyam. The share price of satyam fell 14 per cent on Wednesday, Dec 24, its lowest in more than four-and-a-half years. In New York, Satyam ADRs were 16.5% lower at $6.90 in early trade. In all, in the Indian markets, the share has lost 28% since last week when it announced the deal with Maytas companies.
The news on the ban was broken by FoxNews, which said that from 2003 to 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. But, concerns first arose when the company sold preferential stock options to the Bank's CIO Mohamed Muhsin. The transaction was considered improper and Muhsin was asked to leave. When contacted, Sudip Mozumder, the official spokesman for the World Bank in New Delhi, told TOI, "It's a Washington development. All I can say is that the quotes attributed to the World Bank official in the Fox News are correct."
A Satyam spokesperson said, "As a matter of company policy we normally do not comment on individual customers, contracts and relationships." Meanwhile, speculation was rife on Tuesday that Satyam's chairman B Ramalinga Raju, who is now in the eye of the storm, had put in his papers on Monday night. This was even as Raju was closeted with his colleagues in long meetings on Tuesday further fuelling speculations. The spokesperson said, "We have read about it in the media. We have nothing to say about it."
OneIndia News (With inputs from Agencies)