UPL related cos settle 'misconduct' charges slapped by World Bank

New Delhi: Five companies associated with or related to pesticides maker UPL Ltd have settled ‘misconduct’ charges with the World Bank that emanated from violations in execution of projects funded by the multilateral financial institution.
The companies have been asked to undergo a corrective action plan, according to two people aware of the matter, and are banned from World Bank-funded projects until the agency is satisfied with the remedial measures taken by them.

The companies were carrying out waste management contracts for a sustainable city project in the Vietnamese city of Danang, according to the people. They violated the World Bank’s procurement guidelines by failing to disclose information about sub-contractors hired for the project, a UPL executive said on condition of anonymity.

The World Bank group has not disclosed details of the violations on its website, although it has identified the entities that have entered into “negotiated resolution agreements” with it. The companies are Tatva Global Environment, Gharpure Engineering & Construction, Enviro Technology, Kerala Enviro Infrastructure and Bharuch Enviro Infrastructure. Kerala Enviro Infrastructure is identified as an associate company of UPL in its annual report for FY18, while the other four are listed as related parties. “The companies … are not owned by UPL Ltd. UPL has no role to play in their functioning and therefore we are unable to comment,” a spokesperson for publicly traded UPL said in response to ET’s queries.

As part of the corrective action, the companies appointed an independent auditor to inspect their books and submit a report to the agency.

“The entities were independent venture capital investments by Shroffs with no role in day-to-day functioning,” said a spokesperson for UPL’s promoters, the Shroff family. “There was a deviation to the extent of communication procedure after winning the contract. This was pointed out by World Bank and immediately rectification steps were initiated.”

The World Bank’s internal investigation arm, Integrity Vice Presidency or INT, is monitoring the investigation into the misconduct charges. The INT is tasked with monitoring projects financed by the World Bank to ensure there are no violations of end-use guidelines of the sanctioned funds.

UPL, formerly known as United Phosphorous Ltd., ranks among the top five pesticides makers globally after it acquired US-based Arysta Lifesciences in a $4.2 billion deal last year.