Just when India Inc was trying to recover from the Satyam Computers' fiasco after the arrest of it's former CEO Ramalinga Raju, the World Bank (WB) whip on another IT major Wipro has come as a shock.
The World Bank decision to debar Wipro and stall future contracts of outsourcing to the software company has left the IT industry bewildered. In all, five Indian entities have been taken to task which include Megasoft.
The reason cites is that Wipro violated the provisions and procurement guidelines and offered improper benefits to WB staff. Naturally, Indian Information Technology industry is feeling the heat, as also the share market.
Worse, the IT professionals are getting panicky. Wipro, which is India's third largest software company after Infosys and TCS, has held that it's business and revenue will not be affected due to the World Bank ban (for violation of 'fraud and corruption provisions' of the Procurement Guidelines) till 2011. The company head Azim Premji was once the richest Indian.
Satyam has already been banned for eight years after the Rs 7000 crore scam came to light and Ramalinga Raju had to go to jail for inflated balance sheets. Two other Indian financial firms Nestor Pharmaceuticals and Gap International have been barred from doing business with the bank for violating guidelines.
Still, all is not lost. The situation isn't as bad. Industry watchers say that it can't go worse. Government has already constituted a new Board for Satyam and offered a bailout package. Satyam's share is already looking up after the crash. Of course, the government now needs to keep an eye on the functioning of IT firms in future with the help of Industry bigwigs.
