Monday, July 16, 2007


Jul. 16, 2007 (M2 Communications Ltd. delivered by Newstex) --

WASHINGTON - 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

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