Shares of engineering major Larsen and Toubro declined nearly three per cent in early trade today, after the World Bank imposed a six-month ban on the company.
The World Bank has barred Larsen & Toubro (L&T) from doing any business with it or the projects funded by it for six months, after finding that an executive of the Indian conglomerate had indulged in a fraud.
The announcement was made after market hours on Friday.
Reacting to the development, the company’s stock fell 2.73 per cent to an intra-day low of Rs 1,455.25 on the BSE.
Similar movement was seen on the National Stock Exchange, where the company’s shares after opening at Rs 1,460, fell 2.75 per cent to an early low of Rs 1,456.25 apiece.
The debarment would continue till September 6, making L&T ineligible for being awarded contracts for any World Bank-funded projects, from receiving any loan proceeds made by the World Bank or participating in any World Bank-financed project.
The stock however, recovered the lost ground and was trading at Rs 1,507.45, up 0.76 per cent on the BSE and at Rs 1,505.65, higher by 0.54 per cent on the NSE.
“The sanctions imposed by the World Bank for six months ending September 6, 2013, from participating in the World Bank-funded/executed projects is not expected to have material impact on the company’s present or future operations or its profitability or financials,” L&T had said on Friday.