World Bank has debarred Progressive Constructions Ltd (PCL), founded by Union Minister and Congress leader K Sambasiva Rao, for minimum eleven years for violating its 'fraud and corruption policy'.
The Bank said that the debarment would apply to all legal entities directly or indirectly controlled by PCL and the ineligibility period began from November 26, 2013.
Calls made to the company for their comments did not elicit any reply, while phone calls and messages sent to Rao and his office in New Delhi also remained unanswered.
The Hyderabad-based company has faced this sanction for violation of the Procurement Guidelines applicable to the World Bank-financed projects.
"The period of ineligibility of Progressive Constructions Limited extends to any legal entity that it directly or indirectly controls," the Bank said, but did not specify the details of the concerned projects or contracts, as also the specific details of the violations.
While the Bank has not named any promoters or top officials of the debarred company, PCL's website shows Rao, currently Textiles Minister in the Union Cabinet, set up Progressive Engineering Company as a partnership firm in 1966.
With expansion into other areas, this company was transformed into a Private and a Limited Liability entity in 1982, resulting into creation of Progressive Constructions Limited, the website says.
Currently, PCL is headed by Srivani Mullapudi, its Managing Director, and it is engaged in infrastructure building for sectors like irrigation, power, rail, transport, housing and industrial establishments.
"The minimum period of ineligibility is the eleven-year period," the World Bank said.
It added that the company can be released from this ineligibility after the end of eleven years, "only if it has demonstrated to the World Bank Group's Integrity Compliance Officer that it has complied with" certain conditions.
These conditions include the company having taken appropriate remedial measures to address the sanctionable practice for which it has been sanctioned, it has put in place an effective integrity compliance program acceptable to the World Bank and has implemented this programme in a manner satisfactory to the Bank.
In the past, the World Bank has blacklisted several Indian companies on similar grounds, while about a dozen of them are still under ineligibility period. Those having faced action in the past include Satyam, Wipro, Videocon and L&T group entities.