For four years, the Indian corporate governance crisis deepened yesterday when it emerged that the outsourcing group Wipro has been barred from dealing with the world bank. The Bangalore-based group which is India’s third biggest outsourcing provider said that it was banned in 2007 for offering shares to the world bank employees when it floated stock in the US in 2000. The Indian Information Technology firm, the Megasoft Consultants was also barred after it participated in a joint venture with the World Bank employees while the conducting business with the institution. On the Mumbai stock exchange, its shares fell 15 percent yesterday while the Wipro fell about 12 percent.
The Wipro issued that a statement denying any wrong doing over the 2000 flotation. The Wipro has done no wrong, they offered three employees shares at the market rate. As the part of the company’s initial public offering of the US listed shares in 2000, the wipro offered stock to employees and clients that includes to a senior staff of the world bank who then made this offer available to the family and friends. They bought $72,000 of shares but all the participants had signed statements that they were not violating ethics or conflicts of interest policies. It is the latest blow for the prestigious Indian IT sector which has been rocked by the scandal whose the founder is now in jail after the confessing.
To bring a new auditors and a new layer of the top management with the government backing. The trio of government appointed troubleshooters. This is headed by Deepak Parekh a well known chartered accountant. The Satyam would move to retain clients assess the extent of the fraud and appoint a new managers. The company’s shares jumped to end the day more than 40 percent up at 34.40 rupees. The dealers said that the investors had been buoyed by the news that the board would be expanded in the next few days by a new chairman, chief executive and finance officer. Parekh said that the company is a 20 year old company with a client list that reads like a Who’s Who of the global corporations.
REFERENCE:
http://www.guardian.co.uk/world/2009/jan/13/india-corporatefraud
