World Bank Debars Indian Firms

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World Bank Debars Indian Firms

WASHINGTON, July 16, 2007 – The World Bank has declared two India-

based firms, Nestor Pharmaceuticals Ltd. (Nestor) and Pure Pharma

Ltd. (Pure Pharma), ineligible to be awarded Bank-financed

contracts. Both firms were found to have engaged in collusive

practices in connection with the Bank-financed Reproductive and Child

Health Project (RCH I) in India. Nestor has been debarred for a

period of three years, while Pure Pharma is debarred for one year.

The Sanctions Board's decisions were based on evidence from an

investigation by the World Bank's Department of Institutional

Integrity (INT) into allegations of impropriety in the procurement of

pharmaceuticals under the RCH I project. This was the first case

heard by the Bank's Sanctions Board, which replaced the Sanctions

Committee in October 2006 when the Bank's Sanctions Reforms became

effective.

" The Reproductive and Child Health program was designed by the

Government of India to help deliver much-needed medical services to

some of the most vulnerable citizens, " said Praful Patel, World Bank

Vice President for South Asia. " The actions of both companies harmed

the very people this project was meant to help. "

The Sanctions Board, a recently constituted body inside the World

Bank Group comprising external as well as internal members, weighed

the evidence presented both by INT as well as the firms themselves.

In the end, it found that both firms had engaged in sanctionable

misconduct.

Danny Leipziger, Vice President of the World Bank Group and Chairman

of the Bank's Sanctions Board, commented: " The Sanctions Board

decision is in keeping with the Bank's mandate to ensure that its

funds are properly utilized, and in this case, it was found that the

two firms had behaved improperly and the requisite penalties were

imposed. "

The investigation into RCH I was a very complex and labor-intensive

initiative spanning several years. The investigation involved the

analysis of a large number of documents, multiple field missions and

the conduct of scores of interviews.

Background Information

The World Bank Department of Institutional Integrity (INT) is charged

with investigating allegations of fraud and corruption in Bank-

financed projects. The department reports directly to the President

of the World Bank and is staffed by a multinational team including

investigators, legal specialists, forensic accountants, and others.

Additional information can be found at

http://www.worldbank.org/integrity.

The sanctions process is an internal administrative process within

the World Bank. It provides for due process of all parties involved

in a dispute. Since 1998, the World sanctioned more than 330 firms

and individuals. For more information on procurement and sanctions,

see: http://www.worldbank.org/procure

For more information on the World Bank's anti-corruption policies and

activities, see: http://www.worldbank.org/anticorruption

Press Release No:2007/016/INT

Media Contacts:

In Washington - Theis (202) 458-8626

dtheis@...

In Delhi - Sudip Mozumder 91-11-51479210

smozumder@...