Infrastructure giant Larsen & Toubro (L&T) on Friday said the World Bank's six-month sanction against it would not have any significant impact on its business and the group has taken necessary measures to prevent recurrence of any such incident.
The statement comes after the World Bank barred L&T from doing any business with it or any projects that it has funded for 6 months. The bank alleged that an L&T executive had indulged in a fraud by committing forgery.
"A junior employee in our medical equipment's business falsified some customer testimonials and submitted them in support of an offer. On discovery of misrepresentation the employee was confronted with the facts and he resigned from the company. L&T has since divested the medical equipment's business," the Indian conglomerate said in a statement to NDTV, adding that "control has been tightened across the L&T group to prevent recurrence of such incidents".
The employee has now resigned from the company, a spokesperson told PTI. "L&T has since divested the medical equipment business," he said.
The World Bank said in its sanction order that L&T's ineligibility would continue across the entire World Bank group and has been imposed on L&T "for fraudulent practices" as per the bank's procurement guidelines against fraud and corruption.
The debarment will continue till September 6, making L&T ineligible for being awarded contracts for any World Bank- funded projects, from receiving any loan proceeds made by the bank or participating in any bank-financed project.
During the debarment period, L&T as well as any of the entities controlled directly or indirectly by it can't be nominated even subcontractor, consultant, manufacturer, supplier or even service provider to an otherwise eligible firm being awarded a World Bank-financed project.
The matter pertains to a bid submitted by L&T through Regional Business Head of its Medical Equipment and Systems unit to a World Bank-financed project in Tamil Nadu.
In January 2005, the World Bank Group had entered into a Development Credit Agreement with the Indian government to provide $110.83 million of International Development Association credit for the Tamil Nadu Health Systems Project.
It was set up to improve the effectiveness of health systems in the state by increasing access to critical health services for poor, disadvantaged and tribal groups.
In July 2008, bidding documents were issued by Tamil Nadu Medical Service Corporation for a contract to supply 130 ultrasound scanners under the Project, following which L&T submitted a bid on September 3, 2008 through the said Regional Business Head.
Upon technical and financial evaluation, L&T's bid was found to be the lowest-priced, but a complaint was received later that some of the certificates submitted with the bid might have been forged.
The bid contained a total 115 performance certificates purportedly issued by medical facilities stating that the ultrasound scanners supplied by L&T were working well.
After the company was asked to explain, the Regional Business Head said that some medical facilities may have mistakenly denied issuing the certificates and requested that L&T "not be viewed as (having) indulged in fraudulent practice".
In December 2008, L&T was informed that the tender has been cancelled and the contract was awarded to another firm through a new bidding process.
After looking into the matter, the World Bank's Integrity Vice Presidency (INT) had alleged that L&T "engaged in fraudulent practices by submitting forged performance certificates with its bid".
The statement comes after the World Bank barred L&T from doing any business with it or any projects that it has funded for 6 months. The bank alleged that an L&T executive had indulged in a fraud by committing forgery.
"A junior employee in our medical equipment's business falsified some customer testimonials and submitted them in support of an offer. On discovery of misrepresentation the employee was confronted with the facts and he resigned from the company. L&T has since divested the medical equipment's business," the Indian conglomerate said in a statement to NDTV, adding that "control has been tightened across the L&T group to prevent recurrence of such incidents".
The employee has now resigned from the company, a spokesperson told PTI. "L&T has since divested the medical equipment business," he said.
The World Bank said in its sanction order that L&T's ineligibility would continue across the entire World Bank group and has been imposed on L&T "for fraudulent practices" as per the bank's procurement guidelines against fraud and corruption.
The debarment will continue till September 6, making L&T ineligible for being awarded contracts for any World Bank- funded projects, from receiving any loan proceeds made by the bank or participating in any bank-financed project.
During the debarment period, L&T as well as any of the entities controlled directly or indirectly by it can't be nominated even subcontractor, consultant, manufacturer, supplier or even service provider to an otherwise eligible firm being awarded a World Bank-financed project.
The matter pertains to a bid submitted by L&T through Regional Business Head of its Medical Equipment and Systems unit to a World Bank-financed project in Tamil Nadu.
In January 2005, the World Bank Group had entered into a Development Credit Agreement with the Indian government to provide $110.83 million of International Development Association credit for the Tamil Nadu Health Systems Project.
It was set up to improve the effectiveness of health systems in the state by increasing access to critical health services for poor, disadvantaged and tribal groups.
In July 2008, bidding documents were issued by Tamil Nadu Medical Service Corporation for a contract to supply 130 ultrasound scanners under the Project, following which L&T submitted a bid on September 3, 2008 through the said Regional Business Head.
Upon technical and financial evaluation, L&T's bid was found to be the lowest-priced, but a complaint was received later that some of the certificates submitted with the bid might have been forged.
The bid contained a total 115 performance certificates purportedly issued by medical facilities stating that the ultrasound scanners supplied by L&T were working well.
After the company was asked to explain, the Regional Business Head said that some medical facilities may have mistakenly denied issuing the certificates and requested that L&T "not be viewed as (having) indulged in fraudulent practice".
In December 2008, L&T was informed that the tender has been cancelled and the contract was awarded to another firm through a new bidding process.
After looking into the matter, the World Bank's Integrity Vice Presidency (INT) had alleged that L&T "engaged in fraudulent practices by submitting forged performance certificates with its bid".
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