World Bank bars L&T for 6 months over forgery

MUMBAI: The World Bank has barred L&T from doing any business with it or on projects funded by it for six months, after finding that a senior executive of the Indian engineering company had indulged in fraud way back in 2008. The debarment will continue till September 6, making L&T ineligible for contracts for any World Bankfunded project, from receiving proceeds of any loan by the institution or participating in any bank-financed project.

The sanction order, dated March 7, said L&T’s ineligibility would continue across the entire World Bank group and has been imposed on L&T “for fraudulent practices” as per the bank’s Procurement Guidelines against Fraud and Corruption.

During the debarment period, L&T as well as any of the entities controlled directly or indirectly by it can’t be nominated as a subcontractor, consultant, manufacturer, supplier or even service provider to an otherwise eligible firm being awarded a World Bank-financed project.

The debarment came about because of irregularities in a bid submitted by L&T through the Regional Business Head of its Medical Equipment and Systems unit to a bank-financed project in Tamil Nadu in September 2008.

“A junior employee in our medical equipment business falsified some customer testimonials and submitted them in support of an offer. On discovery of this misrepresentation, the employee was confronted of the fact and he resigned from the services of the company,” D Morada, vice-president, L&T, told ET. L&T has since divested the medical equipment business.

The company has taken preventive measures across the group to prevent reoccurrence of such incidents, he added. “We do not expect these sanctions will have any significant impact on our business", Morada said.