Questions About a Pricey Conflict
World Bank looks into an ex-official's stock portfolio
In a statement, Satyam, which generated more than $1 billion in revenue in the fiscal year ending March 31 and is publicly traded on the New York Stock Exchange under the symbol SAY, said it had enjoyed a "long-standing relationship with the World Bank," a "valued" customer. It went on to say that the bank had not "advised Satyam of any concerns about any improper conduct by the company or its representatives." It isn't clear whether Muhsin had close ties with Satyam's management. In May 2005, he was a guest speaker at a Satyam "customer summit" at an Arizona resort. His biography for the event says that "he has implemented major reforms using IT in the World Bank."
"Partnership." Satyam benefited from those reforms. According to bank administrators, the company's $100 million in work has included assisting the bank in developing its Intranet system and providing other technical services. In June 2003, Satyam won a long-term contract with the bank, competing against, it said at the time, "stiff competition from other global IT companies." A bank official, Rakesh Asthana, then a top aide to Muhsin, described the contract award as a major step forward in the bank's relationship with Satyam. "With this contract, our relationship with Satyam has matured from a contractual relationship to a strategic partnership," Asthana said. "Over the next five years, we see Satyam as a key contributor to the implementation of the World Bank's IT strategy." Bank administrators say that Muhsin did not award the contracts. Such awards, they say, are made by the bank's corporate procurement unit.
According to the sources, investigators are reviewing how Muhsin came to invest in initial public offerings issued in the United States by Satyam and a subsidiary several years ago. The sources say that Muhsin profited on one of the investments but lost money on the other venture.
Earlier this year, investigators formally notified Muhsin of some of the allegations. If he is found to have engaged in misconduct, the bank could withhold his separation grant and permanently bar him from ever working as a bank consultant, a lucrative source of income for many retirees. He could appeal any misconduct decision ultimately to the World Bank Administrative Tribunal. Its conclusions are binding.
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