Videocon debarred from World Bk operations for 3Yrs

In a blow to the image of India Inc, the World Bank has debarred Venugopal Dhoot-led Videocon for three years beginning January 10, 2010 for indulging in fraudulent and corrupt practices in some of its dealings with the bank. Ban on the company will be operative till January 11, 2013, a World Bank news release posted on its website said.

The ban came after investigations by the World Bank as part of its broader governance and anti-corruption agenda, the bank said in a news release from Washington. Charges against Videocon include violation in procurement guidelines of the bank. Action was earlier initiated against two other Indian companies - Satyam computers and Wipro, on charges of fraudulence related to contractual norms.

“The period of ineligibility of Videocon extends to any firm directly or indirectly controlled by the sanctioned firm,” World Bank said. Incidentally, Videocon’s stock plummeted 2.12 per cent on the Bombay Stock exchange (BSE) to close at Rs 226.50 on Tuesday. Market capitalisation of the company stands at Rs 6,402 crore.

Meanwhile, World Bank has given Videocon the option to make amends. “The debarment may be reduced by up to one year if Videocon takes appropriate steps to cooperate with the World Bank and implements a corporate compliance programme that is satisfactory …” the bank’s news release said.

When contacted, the bank’s spokesperson Sudip Mozumder told from Washington DC, “I am still checking with the Institutional Integrity Team if they were considering a reduction in ban on Videocon.”

Videocon figured in the list of defaulted companies that was put on the bank’s website on January 11, 2010. The related news release was issued on January 27, 2010, the spokesperson said.

The release was not specifically circulated to the Indian media.

Meanwhile, Videocon chairman Venugopal Dhoot told , “As per conditions of a 2003 World Bank-aided project, we had tendered to supply a small consignment of 300 air conditioners along with certification of some earlier government supplies for air conditioners. The matter was handled at a very junior level in eastern Uttar Pradesh.”

“World Bank officials came to the conclusion that the certification was incorrect. Though we have contested the same with the bank, we immediately as a precautionary measure initiated a very high level enquiry.”

Dhoot further clarified, “We have not done any business of any nature whatsoever with, World Bank or projects aided by it.”