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World Bank sanctions healthcare group for hiding agent commissions

The World Bank Friday debarred two related healthcare companies for misrepresenting the amount of commissions one of them agreed to pay an agent under projects in Bangladesh.

The 18-month debarments were imposed on ConvaTec International Services GmbH, based in Switzerland, and ConvaTec Malaysia Sdn Bhd, based in Malaysia.

ConvaTec Switzerland misrepresented the commissions. The Malaysia unit helped it  engage in “the fraudulent practices,” the World Bank said.

In their settlement with the World Bank, the companies acknowledged “responsibility for the underlying sanctionable practices.”

During the debarments, they aren’t eligible for work on World Bank-financed projects.

Their parent company — Cidron Healthcare Limited, based in Jersey — received a conditional non-debarment. That means it’s still eligible for World Bank-financed contracts as long as it complies with its obligations in the settlement agreement. If it doesn’t meet its obligations, the sanction turns into a full debarment.

Three bids were involved — two for the Health Nutrition and Population Sector Program that closed in 2011. And one for the Health Sector Development Program that close in June 2017.

The World Bank said it shortened the debarments to 18-months because of the companies’ “extensive cooperation with the World Bank’s investigation.”

Their cooperation included conducting an internal investigation and sharing the results with the World Bank, and enhancing their compliance programs.

But the 18-month debarments qualify for cross-debarment by the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the African Development Bank.

A list of all World Bank debarred entities and individuals is here.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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