Washington September 29, 2010 - The World Bank Group’s Sanctions Board recently debarred four companies and two individuals for fraudulent practices in projects in India and Afghanistan. The debarments followed inquiries by the World Bank's Integrity Vice Presidency (INT), which is responsible for investigating fraud and corruption in World Bank-financed projects.
In India, the World Bank Group debarred Ambalal Sarabhai Enterprises Limited (ASE) and Chemito Technologies Pvt. Ltd. (Chemito) for having engaged in fraudulent practices relating to the Food and Drugs Capacity Building project. Both ASE and Chemito are ineligible to be awarded contracts under any Bank Group-financed or Bank Group-executed project or otherwise participate in the preparation or implementation of such projects for three years. The debarment may be reduced to two years if the companies put in place and implement effective corporate compliance programs.
The third decision relates to fraudulent practices by Global Spin Weave Limited (GSW) and its Director Sudhir Agrawal. The company’s misconduct was substantiated in relation to three Bank-financed projects in India; namely: First Reproductive and Child Health Project, Second National HIV/AIDS Control Project and the Malaria Control Project. According to the Sanctions Board decision, GSW is ineligible to be awarded contracts under any Bank Group-financed or Bank Group-executed project or otherwise participate in the preparation or implementation of such projects for five years. The debarment may be reduced to four years if GSW puts in place and implements an effective corporate compliance program. Mr. Agrawal’s period of ineligibility is three years.
“The outcome of INT’s work demonstrates that fraud and corruption can occur across sectors and will continue to challenge the success of development projects,” said Leonard McCarthy, World Bank Integrity (INT) Vice President. “The Sanctions Board rulings are a clear signal that the World Bank Group takes allegations of misconduct seriously to ensure that development resources are not wasted. In parallel, INT will build on the cooperation and partnerships with national authorities to advance referrals and corporate compliance.” He also added that managing fraud and corruption risks is a prominent feature of the World Bank Group’s Governance and Anticorruption (GAC) agenda.
In relation to the Urban Water Supply and Sanitation Project in Afghanistan, the Sanctions Board debarred Ronberg Gruppe LLC, AG (Ronberg) and its Director Nikolay V. Vakorin for having engaged in fraudulent practices. Ronberg and Mr. Vakorin are ineligible to be awarded contracts under any Bank Group-financed or Bank Group-executed project or otherwise participate in the preparation or implementation of such projects for three years.
"We will continue to mobilize INT’s resources to support high risk projects,” said Leonard McCarthy, World Bank Integrity Vice President. “The lessons generated by INT’s work are critical inputs to enhancing the institution’s efforts in addressing governance challenges and preventing fraud and corruption through early detection of red flags in these situations,” he added.
These cases are eligible for cross debarment under the April 2010 Agreement for Mutual Enforcement of Debarment Decisions entered into by the African Development Bank Group, Asian Development Bank, the European Bank for Reconstruction and Development, the World Bank Group and the Inter-American Development Bank Group.