Chinese construction conglomerate China First Metallurgical Group Co Ltd (CFMCC) has appealed against a ban on participation in World Bank projects and said its exclusion for alleged irregularities would have only a limited impact on revenues, reports Reuters.
The World Bank announced on Thursday it had banned CFMCC, a subsidiary of the China Metallurgical Group Corp (MCC), from its projects for three years because of the company's "fraudulent misconduct" in an urban transport project in Bangladesh.
In a statement published on its website (»¶Ó¹âÁÙÖйúÒ»Ò±¼¯ÍÅÓÐÏÞ¹«Ë¾ÍøÕ¾£¡) CFMCC said it had sent letters to the World Bank twice to seek an overturn of the decision, but to no avail.
"We continue to have reservations over the decision," CFMCC said.
It (World Bank ban) marked the latest setback for MCC, with a listed unit named Metallurgical Corp of China Ltd, in its "venturing-abroad" process following the suspension of two of its construction projects in Libya this year and allegations of graft in a Afghan mining venture.
Chinese state-owned companies are encouraged by their government to "go out" as part of China's grand plan of gaining international influence, but setbacks and misconduct allegations often accompany ambitious plans.
The World Bank's Integrity Vice Presidency, the anti-fraud unit of World Bank-financed projects, said last week that it had detected instances of irregularities in a CFMCC Bangladesh bridge project. It did not give further details.
CFMCC said the Bangladesh project, with a contractual value of $20.7 million, was won through the bidding process of the World Bank and the main construction work was completed in November 2004.
According to the company's statement, the World Bank questioned its purchase and installation of shock bearing parts on the bridge after an investigation in December. CFMCC said it purchased the equipment from TechStar, a US company, and the installation process was conducted under professional advice.
CFMCC also played down the financial impact of the World Bank decision, saying income generated from overseas projects only accounted for 6.5 percent of its total revenues in the last three years, and the Bangladesh bridge was the only World Bank project it had taken in the last decade.
However, the company added that it would "take a lesson from this and take immediate actions to seriously review overseas project management processes, step up controls and regulate management behaviour".
MCC has come under scrutiny in 2008 over its $4.4 billion Aynak copper mine in Afghanistan and was accused of paying up to $30 million in bribes to the Minister of Mines and Industries to win the contract. The ministry denied the allegations.
WB bans Chinese firm for irregularities in BD project
The World Bank announced on Thursday it had banned CFMCC, a subsidiary of the China Metallurgical Group Corp (MCC), from its projects for three years because of the company's "fraudulent misconduct" in an urban transport project in Bangladesh.
In a statement published on its website (»¶Ó¹âÁÙÖйúÒ»Ò±¼¯ÍÅÓÐÏÞ¹«Ë¾ÍøÕ¾£¡) CFMCC said it had sent letters to the World Bank twice to seek an overturn of the decision, but to no avail.
"We continue to have reservations over the decision," CFMCC said.
It (World Bank ban) marked the latest setback for MCC, with a listed unit named Metallurgical Corp of China Ltd, in its "venturing-abroad" process following the suspension of two of its construction projects in Libya this year and allegations of graft in a Afghan mining venture.
Chinese state-owned companies are encouraged by their government to "go out" as part of China's grand plan of gaining international influence, but setbacks and misconduct allegations often accompany ambitious plans.
The World Bank's Integrity Vice Presidency, the anti-fraud unit of World Bank-financed projects, said last week that it had detected instances of irregularities in a CFMCC Bangladesh bridge project. It did not give further details.
CFMCC said the Bangladesh project, with a contractual value of $20.7 million, was won through the bidding process of the World Bank and the main construction work was completed in November 2004.
According to the company's statement, the World Bank questioned its purchase and installation of shock bearing parts on the bridge after an investigation in December. CFMCC said it purchased the equipment from TechStar, a US company, and the installation process was conducted under professional advice.
CFMCC also played down the financial impact of the World Bank decision, saying income generated from overseas projects only accounted for 6.5 percent of its total revenues in the last three years, and the Bangladesh bridge was the only World Bank project it had taken in the last decade.
However, the company added that it would "take a lesson from this and take immediate actions to seriously review overseas project management processes, step up controls and regulate management behaviour".
MCC has come under scrutiny in 2008 over its $4.4 billion Aynak copper mine in Afghanistan and was accused of paying up to $30 million in bribes to the Minister of Mines and Industries to win the contract. The ministry denied the allegations.
WB bans Chinese firm for irregularities in BD project
