Jan

12

After the recent Satyam Computers scandal, where its former boss Ramalinga Raju admitted of doctoring the company’s accounts and assets to a fraudulent value of more than a billion dollars to ‘cover up’ the company’s losses, another major Indian BPO/IT giant faces a black mark against its reputation.

World Bank, a global financial institution which provides funding and technical assistance for developing countries, has announced that it black-listed Wipro’s IT services unit. For four years, Wipro IT Services is barred from doing any direct business with World Bank.

The reason?

World Bank alleges that Wipro has been providing improper benefits to World Bank senior staff and their families. These benefits were offered in the form of company stock, amounting to USD72,000.

Of course, Wipro challenges the World Bank claims, stating that the participants in the scheme to sell these stocks had already signed statements that they weren’t in violation of ethics or conflict of interest policies.

Furthermore, Wipro seems to shrug the blacklisting, stating that the business of World Bank is only minimal and would not affect their business operations.

Yeah right. I think that is just wishful thinking aloud.

The World Bank blacklisting of Wipro could not have come at a worse time when confidence in India’s outsourcing has come to a low since the recent Satyam scandal. People are still reeling from Raju’s confession, the World Bank has already blacklisted Satyam for 8 years and now this news about Wipro.

Bad press usually means Bad for business, particularly if it undermines one’s credibility and in turn, one’s ability to achieve results.

I wonder how long will we have to hold our breath this another bombshell against India business blows.

Outsourcing Solutions, Inc. – your outsourcing partner!

References

  1. Vaswani, Karishma. “Satyam Scandal rocks India”. 8 January 2009. BBC News. Accessed 8 January 2009. Link here
  2. Naqvi, Muneeza. “World Bank bars dealings with unit of Indian outsourcing giant Wipro.” 12 January 2009. Newsday. Accessed 12 January 2009. Link here

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