World Bank scraps $ 1.2 billion Bangladesh loan after corruption allegations

Jul 1, 2012. The World Bank canceled a $ 1.2 billion loan for a bridge in Bangladesh saying the country’s government failed to take action against “a high-level corruption conspiracy.”

“It’s like a bolt from the blue,” Bangladesh’s Communication Minister Obaidul Quader told reporters in Dhaka today. Quader said the bank’s decision is “unfortunate and mysterious.”

Two former employees of SNC-Lavalin Group Inc., Canada’s largest engineering company, were arrested on corruption charges in connection with the bridge project, the Royal Canadian Mounted Police said last week. The World Bank on Friday said the case also involves Bangladeshi government officials and private individuals.

“The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption,” the Washington-based bank said in an e-mailed statement Friday. “We have both an ethical obligation and a fiduciary responsibility to our shareholders and” the member states contributing to the fund that lends to poor countries, according to the statement.

World Bank scraps $ 1.2 billion Bangladesh loan after corruption allegations,