These are jittery times for Indian tech outsourcers. Shares of Wipro (WIT) are down over 7% today, after it was revealed that the company faces a four-year suspension from the World Bank, during which time it can’t do any work for the organisation. Its competitor Satyam (SAY) had received a similar penalty.
What was the infraction? It doesn’t sound like a huge deal
TechTraderDaily: In connection with the program, Wipro offered the World Bank participation in the program through its Chief Information Officer and senior staff, who in turn directed the offer to members of their family and friends. Together they acquired 1,750 shares for $72,000. Wipro said that 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.”
Wipro also said that its revenue from the World Bank is insignificant. “Our inability to get future business from World Bank will not adversely affect our business and results of operations,” the company said.
So it’s not a huge deal financially, but the Satyam story has made everyone look vulnerable — hence the big decline in Wipro shares.
Oh, as for Satyam. It finally opened and lost about 90% of its value.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.