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World Bank Sanctions Three Companies, One Individual For Corrupt Practices

Press Release No:2002/010/S

Contact Person:
Merrell Tuck (202) 473-9516


WASHINGTON, July 6, 2001--The World Bank today announced sanctions against three companies and one individual for violating the Bank's prohibitions against fraudulent and corrupt practices. The sanctions arose out of the findings of a Bank investigation of the Uzbekistan Cotton Sub-Sector Improvement Project.

The Bank declared Surendra Singh as well as Eastern Trading Ltd., Gap International, and Scan Distribution Pte. Ltd., all corporations owned or controlled by Mr. Singh, permanently ineligible to participate in Bank-financed projects. Eastern Trading Ltd. is based in the United Arab Emirates, Gap International is based in India, and Scan Distribution Pte. Ltd. is based in Singapore.

In ordering the debarments and reprimands, World Bank President James D. Wolfensohn acted on the recommendation of the Bank's Sanctions Committee, which found that the sanctioned firms and Mr. Singh had engaged in corrupt practices as defined in the Bank's Procurement Guidelines and Consultant Guidelines. (The text of the relevant portions of the Procurement Guidelines appears on the next page.)

The debarment of any company applies as well to any firm which owns the majority of the capital of that company and to any firm of which the company owns a majority of the capital.

Since the Sanctions Committee was established in November 1998, the Bank has declared sanctions against 61 firms, including the three listed above. 14 individuals, including Mr. Singh, have been debarred.

World Bank Procurement Guidelines Appear Below.

Fraud and Corruption
Relevant provisions of the World Bank's Procurement Guidelines

PARA. 1.15: It is the Bank's policy to require that Borrowers (including beneficiaries of Bank loans), as well as bidders/Suppliers/Contractors under Bank-financed contracts, observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, the Bank:

(a) defines, for the purposes of this provision, the terms set forth below as follows:

(i) "corrupt practice" means the offering, giving, receiving, or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution; and

(ii) "fraudulent practice" means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Borrower, and includes collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the Borrower of the benefits of free and open competition;

(b) will reject a proposal for award if it determines that the bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question;

(c) will cancel the portion of the loan allocated to a contract for goods or works if it at any time determines that corrupt or fraudulent practices were engaged in by representatives of the Borrower or of a beneficiary of the loan during the procurement or the execution of that contract, without the Borrower having taken timely and appropriate action satisfactory to the Bank to remedy the situation;

(d) will declare a firm ineligible, either indefinitely or for a stated period of time, to be awarded a Bank-financed contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing, a Bank-financed contract; and

(e) will have the right to require that, in contracts financed by a Bank loan, a provision be included requiring Suppliers and Contractors to permit the Bank to inspect their accounts and records relating to the performance of the contract and to have them audited by auditors appointed by the Bank.

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