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Giant Indian engineering firm hit by World Bank ban

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(Globalpost/GlobalPost)

Shares in Indian engineering firm Larsen & Toubro, one of the country's biggest companies, were down in early trade on Monday after it was banned from World Bank-funded projects for six months.

Shares fell as much as 2.7 percent after the sanctions were applied from March 7 to September 6. The World Bank enforced the ban after finding that an employee of the company had forged documents to win a supply deal five years ago.

Larsen & Toubro (L&T) said in a statement on the Bombay Stock Exchange website that the sanctions were "not expected to have material impact on the company's present or future operations or its profitability or financials".

The World Bank found L&T had failed to stop the employee from forging documents to help secure a contract to supply ultrasound scanners for a health project in India's southern Tamil Nadu state in 2008.

L&T failed to have measures in place to prevent or detect such frauds, according to the World Bank order.

A company executive Deepak Morada on Friday said the documents were forged without company sanction and the employee has since resigned after he was confronted by the management.

After falling sharply in early trade, L&T shares recovered slightly to show a loss of 0.94 percent by late morning.

-- Dow Jones Newswires contributed to this report --

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http://www.globalpost.com/dispatch/news/afp/130311/giant-indian-engineering-firm-hit-world-bank-ban