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World Bank banned Satyam because few contractors from Satyam working onshore at the World Bank office installed spy software, which logs every keystroke typed on the keyboard. The data is sent back to a central location over internet.
What did Wipro do?
Quote:
Originally Posted by diabloo
(Post 1126514)
World Bank banned Satyam because few contractors from Satyam working onshore at the World Bank office installed spy software, which logs every keystroke typed on the keyboard. The data is sent back to a central location over internet.
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Only total morons would do something like this. They were probably trying to be "hackers".
Quote:
Originally Posted by Digital Vampire
(Post 1126559)
The IT company had awarded 1,750 American Depository Shares (ADS) worth $72,000 at the IPO price to World Bank's CIO and two other senior staff members.
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Good old fashioned bakhsheesh!!!
i've heard Wipro has helped the employees in World bank for their benefits, Dunno whether its true, came in some malayalam newspaper today..
The way that I read it, Wipro indirectly bribed WB employees by offering a carrot of shares.
Quote:
Originally Posted by GTO
(Post 1128013)
The way that I read it, Wipro indirectly bribed WB employees by offering a carrot of shares.
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Which, if someone care to dig in, is nothing new in the sales world. Especially so when dealing with Goverment or Quasi-goverment organizations, where there is a lack of clear vision on the objective of the project.
There is some clarification from Wipro in today's TOI. Apparently this did not violate any of the guidelines. The offering of shares happened in 2000. However WB decided to term it as a conflict of interest only in 2007. Looks like some purging activities going on in WB.
Quote:
Originally Posted by GTO
(Post 1128013)
The way that I read it, Wipro indirectly bribed WB employees by offering a carrot of shares.
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Wipro offered its shares (DSP) at market price to some of its customers and employees while it was getting listed in US bourses. See the quote below which clarifies the issue.
Quote:
DSP is a SEC approved program that accompanies Initial Public Offering (IPO) of shares in the US that allows employees, customers, friends and other individuals on a selected basis to participate in the IPO by purchasing relatively small amounts of shares at the IPO price. At that time, DSPs were an overwhelmingly common device to provide shares to such persons. The Program’s objective was to involve employees and customers with the public offering to expand our recognition and brand.
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This was done according to the law existed during 2000. In 2007, WB has started investigating on this due to its change of policy regarding its employees owning shares of its vendors, and hence the fallout. There is no bribing involved and all the transactions happened based on IPO/market price.
Quote:
Originally Posted by sgiitk
(Post 1126864)
Good old fashioned bakhsheesh!!!
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It was sold at IPO price and not free of cost! I dont think that will qualify as bribe. See the my post earlier which clarifies the matter.
Wipro discloses vendor status with World Bank
Bangalore, India / New Jersey, USA, January 12, 2009
Wipro Technologies, the global IT services business of Wipro Limited (NYSE: WIT) today announced that in connection with revised disclosure policies, Wipro and the World Bank are disclosing that in June 2007 the World Bank determined Wipro to be ineligible to contest direct contracts from the World Bank for the period 2007 – 2011.
In 2000, in connection with its Initial Public Offering (IPO) of American Depository Shares (ADS) in the United States, Wipro offered a commonly utilized and Securities and Exchange Commission approved Directed Share Program (DSP) that allowed employees and clients to purchase ADSs at the IPO market price. The Program’s objective was to involve employees and customers with the public offering to expand our recognition and brand. A majority of the shares sold under the DSP were allotted to our employees.
Pursuant to this program, Wipro representatives offered the World Bank, through its Chief Information Officer (CIO) and a senior staff, participation in the program and they directed this offer to members of their family and friends. The aggregate number of shares purchased by them was 1,750 for approximately $72,000 at the IPO price. All participants in the program signed a conflict of interest statement that their purchase did not violate any ethics or conflict of interest policies of their company.
To date, Wipro’s revenue from World Bank is insignificant. Our inability to get future business from World Bank will not adversely affect our business and results of operations.
In response to a recent note issued by the World Bank stating that Wipro is debarred from getting direct contracts from the World Bank for the period 2007 – 2011, Wipro categorically reiterates its position:
* Wipro did no wrong. Wipro issued shares at IPO market price under a commonly utilized and Securities Exchange Commission (SEC) approved Directed Share Program (DSP) to customers and employees at the time of its ADR IPO in 2000
* All recipients were formally required to sign a statement that their purchase did not violate any ethics or conflict of interest policies of their company.
I hope the following FAQ clears the air.
Why is Wipro ineligible to contest for WB contracts?
In June 2007, after its internal investigation, the WB concluded that in October 2000, Wipro provided unapproved benefits to some of its employees. According to WB, this was in violation of their policy.
Why did the WB determine that unapproved benefits were provided to its staff?
In October 2000, in connection with its Initial Public Offering (IPO) of American Depository Shares (ADS) in the United States, Wipro offered a commonly utilized and SEC approved DSP that allowed employees and clients to purchase ADSs at the IPO price. The Program’s objective was to involve employees and customers with the public offering to expand our recognition and brand. No more than 2000 shares were offered to any single participant. A majority of the shares sold under the DSP were allotted to Wipro employees. The balance of the shares was sold to clients and prospective clients. Pursuant to this program, Wipro representatives offered the WB, through its Chief Information Officer (CIO), participation in the program and the CIO directed this offer to members of his family and friends. The aggregate number of shares purchased by them was 1,750 for approximately $72,000 at the IPO price. As a requirement to participate in the program, purchasers were required to provide a representation that no conflict of interest existed and that their purchase did not violate any ethics or conflict of interest policies of their company.
What is a DSP?
DSP is a SEC approved program that accompanies Initial Public Offering (IPO) of shares in the US that allows employees, customers, friends and other individuals on a selected basis to participate in the IPO by purchasing relatively small amounts of shares at the IPO price. At that time, DSPs were an overwhelmingly common device to provide shares to such persons. The Program’s objective was to involve employees and customers with the public offering to expand Wipro's recognition and brand. Wipro issued 3.1625 m shares at $41.375 as part of ADR aggregating $131 million. The total shares sold under the DSP were less than 2% of the total ADS offering.
How many shares were given and at what price?
An aggregate of 1750 ADS were sold to a total of 3 individuals that were either employees, or relatives or friends of WB employees. The ADSs were sold at the IPO price of $41.375 per share for a total consideration of $72,000.
When did the relevant events occur?
The DSP offers were made between September and October of 2000. The WB determination of ineligibility was in June 2007.
Why Wipro is disclosing this information now after more than one and a half years?
Wipro has always maintained the highest standards of corporate governance and disclosure. In the interest of continuing Wipro's practice of sharing relevant information on a timely basis, Wipro have decided to voluntarily disclose information. In connection with the WB’s revision of its disclosure policy, Wipro have also decided to voluntarily disclose this information.
Why has the ineligibility happened in 2007 for ADR issue in 2000?
Wipro is not privy to WB’s reasons why the decision was made in 2007 for events which occurred in 2000. WB conducted an internal investigation in first half of 2007 and notified Wipro of such investigation by requesting Wipro's cooperation and participation. Wipro did so and WB made its conclusion in June 2007.
Has Wipro’s Board been informed about the same? When were they informed?
Yes. Wipro’s Board of Directors was informed at the July 2007 Board meeting immediately after Wipro received the communication from the WB.
What is the past and current business of Wipro with WB?
Wipro’s business with WB has been insignificant. Currently, WB is not an active customer of Wipro. Wipro believe the revenue from WB contracts has not been significant and therefore Wipro's ineligibility to participate in WB contracts will not adversely affect Wipro business.
How is this different from intimation of WB regarding Satyam’s debarment by WB?
Wipro's knowledge of Satyam is limited to what is available in the public domain. Wipro cannot comment on that.
How long is Wipro ineligible for WB contracts?
Wipro is ineligible to bid for WB projects for four years till June 1, 2011.
Wipro wanted its customers and employees be involved in its business and encouraged them to invest in the company. This is the position that the company is taking. If this were really true it should have offered the shares to World Bank and not its employees. World Bank was Wipro's customer and not its employees. Preferences given to customers employees do amount to bribing. Further, even though WB employees were offered shares at IPO price, still they were given preference through DSC program. In an IPO that was oversubscribed this a definite personal favor done to WB employees. SEC approved DSC program. But it is not SEC'c role to look into if Wipro indulged in FCPA violation. FCPA violation is a serios matter for an US listed company. Wipro still talks about its revenues not getting affected. They are going town telling the world that their revenues will not be affected instead of clarifying if they violated any law. Tell me, if this appears as a right attitude to you if you were a potential investor?
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