Videocon Industries Ltd

Venugopal Dhoot-led Videocon of indulging in fraud and corrupt practices in dealings with it, the World Bank has blacklisted the Indian company for three years, ending January 11, 2013.

Videocon Industries Ltd has been barred from doing any business with World Bank for violating "procurement guidelines", for a period of three years, beginning January 11, 2010, a notification on the Bank's website said.

The World Bank had taken a similar tough line with Satyam Computer months before the IT company's founder chairman confessed to an accounting fraud. Videocon was sent a "letter of reprimand subsequent to an administrative process" permitting the company to respond to the allegations, the World Bank said in its latest update of companies blacklisted for doing business due to fraud and corruption charges.

Videocon's name has been listed among firms and individuals ineligible to be awarded a World Bank-financed contract, as it has violated fraud and corruption provisions of the procurement guidelines. "The period of ineligibility of Videocon Industries Ltd extends to any firm directly or indirectly controlled by the sanctioned firm," World Bank said.

It further said that the ineligibility might be reduced by up to one year, if after two years of ineligibility, the Bank's Sanctions Board finds Videocon of having taken "satisfactory " remedial actions. The Videocon group is a conglomerate with interests in consumer electronics, home appliances, oil & gas, telecom & media, among others.

The list of debarred entities from India include two Kolkata-based firms BR & Sons and Hemant Tibrewal, and three Delhi-based entities — Om Prakash Jindal, Upasana Jindal and SM Scientific Instruments Pvt Ltd.

These five entities were debarred by the World Bank in January this year and the sanctions would be in place for three years till January 2013. However, Videocon said it has moved a petition to revoke the ban. "We approached the World Bank in February, 2010, to revoke the ban ... after some hearings, we hope it will be done," Videocon chairman Venugopal Dhoot said.

Dhoot said that the action came on account of some wrong information given by one of its employees in a tender in 2003 for supplying airconditioners worth about $50,000. "We suspended that employee and took disciplinary action. We have so far not supplied anything to the World Bank," he said, adding that given the size of the group this was not a very significant order and his firms would not do anything wrong for securing any supply order. After the tender documents were filed, the World Bank found the wrong information and they debarred the firm, he said.