The World Bank has banned a private mainland company, Zhonghao Overseas Construction Engineering, from bidding for contracts for two years, under the bank's fraud and corruption policy.
An unnamed deputy general manager of Zhonghao forged documents submitted in 2008 as part of its bid for a World Bank contract to rebuild a road in Sudan, according to the World Bank's website.
The Sudan road tender required proof of previous work experience, for which the deputy general manager provided several documents claiming Zhonghao had earlier won a road construction contract approved by the Nigerian government. The evaluation committee concluded several documents provided by the deputy general manager contained false and misleading information.
The World Bank said: 'The record shows the deputy general manager admitted he had created the fraudulent documents precisely with the hope to win the tender. The company used five forged and/or misleading documents within a short period of time, addressing the company's purported involvement in the Nigerian road project.'
Zhonghao is a private company headquartered in Beijing with registered capital of 150 million yuan (HK$184 million), and 'boasts over 10 years of overseas experience', according to its website. The company's businesses include water supply, road and bridge and hydroelectric engineering.
Zhonghao told the World Bank that the deputy general manager's misconduct was an individual case for which the company should not be liable. The World Bank argued that Zhonghao was liable for the misconduct of its deputy general manager due to a lack of controls, with strong financial incentives for employees to aggressively pursue contracts.
The Zhonghao case was part of the details published of World Bank sanctions starting on May 30 against eight companies for fraud and corruption. This is the first time the World Bank has publicised details of its sanctions.
The bank's managing director, Sri Mulyani Indrawati, said: 'The World Bank takes a hard line against corruption, and we believe greater transparency must be part of that effort.'
The eight companies sanctioned on May 30 are Zhonghao, Marketing Enterprises Latin America (a US firm), an Egyptian company, a Thai company, an Indian concern, two Nigerian firms and one from Mexico. Since January 2009, the World Bank has imposed sanctions against 14 Chinese companies for fraud and corruption, including Tianjin Alstom Hydro on February 21.