Satyam hits back at World Bank, demands apology

BS 26/12/08

 

Three days after the World Bank decided to ban it for eight years, Satyam Computer Services today hit back and demanded an apology from the bank for “certain inappropriate statements” made by its representatives.

 

In a statement issued today, India’s fourth largest software services firm said the World Bank has been requested to immediately “withdraw those statements” for the harm done to the company. The company has demanded that the bank should provide it with a full explanation of the circumstances related to the inappropriate statements.

 

Satyam also said that it would evaluate all possible options in view of both the bank’s inappropriate public statements and its response to the company’s requests.

 

Satyam usually does not comment publicly on matters involving its customer relationships. “However, the inaccuracy and inappropriateness of the World Bank’s public statements regarding Satyam has forced us to issue this brief statement in order to set the record straight,” the company said.

 

The World Bank had barred Satyam from doing business with it for eight years, in one of the most severe penalties by a client against a large Indian outsourcing company. The bank said this is because Satyam had provided “improper benefits to bank staff” in exchange for contracts and a “lack of documentation” on invoices.

 

Since the World Bank decision on December 22, the company’s scrip has slumped 16.90 per cent from Rs 162.40 to Rs 134.95.

 

The industry’s reputation for maintaining high standards of corporate governance and data security is critical to ensure that it continues to attract the business of Fortune 500 clients, governments and multilateral agencies such as the World Bank.

 

The sanctions came at a bad time for Satyam, which is under fire over a failed attempt by its board to pay $1.6 billion for companies controlled by the family of B. Ramalinga Raju, its chairman, without seeking wider shareholder approval.

 

Since the World Bank decision on December 22, the company’s scrip has slumped 16.90 per cent from Rs 162.40 to Rs 134.95. The company has lost 40 per cent of its market value since December 16 when it announced its decision to buy two Maytas companies.

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