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World Bank bans India outsourcer Satyam for 8 years

No longer friends with 'improper benefits'

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The World Bank has barred India's Satyam Computer Services – the aid institution's largest software vendor and India's fourth-largest outsourcing company – from doing business with it for eight years.

On Tuesday, World Bank confirmed earlier reports of the ban in a statement that said Satyam had provided "improper benefits" to bank staff and failed to "maintain documentation to support fees charged for its subcontractors."

The decision was made effective in September and was made after a temporary suspension of Satyam that took effect in February.

News of the barring was first reported in October by Fox News, which further alleges World Bank investigators discovered spy software installed by one or more Satyam contractors on workstations in the bank's Washington DC headquarters.

The World Bank denies these claims, stating "there is no evidence that Satyam was involved in malicious attacks on the Bank's information systems."

Satyam began contract work for the World Bank in 2003, maintaining software across all its locations and back-end office support.

The Hyderabad-based company has its work cut out to restore its reputation. Satyam was recently forced by an investor revolt to call off a $1.6bn acquisition of two construction firms partially owned by Ramalinga Raju and his family.

UK mobile payments company Upaid Systems is also suing Satyam on charges of fraud, forgery and breach of contract. ®

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