World Bank bars L&T for six months over forgery

Company says decision would have no significant impact on its business

The World Bank has barred Larsen & Toubro (L&T) from doing any business with it or the projects funded by it for six months, after a senior executive of the conglomerate forged documents in a medical equipment tender.

The sanction, dated March 7, comes ahead of World Bank President Jim Yong Kim’s visit to India beginning March 11. During the debarment, L&T and its entities — controlled directly or indirectly — can’t be nominated as a subcontractor, consultant, manufacturer, supplier or as a service provider to an otherwise eligible firm being awarded a World Bank-financed project.

Larsen & Toubro admitted a junior employee had falsified some customer testimonial. “On discovery of misrepresentation, the employee was confronted with the facts and (he) resigned. L&T has since divested the medical equipment business,” said Deepak Morada, vice-president of corporate communications.

The medical equipment business concerned was sold to Skanray Healthcare in November. “Based on this incident, controls were tightened across L&T group to prevent recurrence of such incidents,” Morada added.

L&T claimed the debarment would not have any significant impact on its business. This sanction, the company said, would be valid only for projects exclusively funded by the World Bank. Though a number of projects in India are funded by the World Bank, few are exclusively funded.

The incident was discovered in March 2011. The matter pertains to a bid from L&T through a regional business head of its medical equipment unit for a project in Tamil Nadu, to improve the access of the poor, disadvantaged and tribal groups to critical health services. In July 2008, bidding documents were issued by Tamil Nadu Medical Service Corporation for a contract to supply 130 ultrasound scanners. L&T submitted a bid, which was found to be the lowest-priced one, in September 2008 through the regional business head. But a complaint later stated some of the performance certificates submitted with the bid might have been forged.