Satyam, India's fourth largest outsourcer, declined to comment on the statement. "Satyam does not discuss individual clients," a Satyam spokeswoman said on Tuesday.

While it is not known what the direct impact will be on Satyam's revenue from the loss of business from the World Bank, the manner in which the outsourcer was shown the door adds to earlier allegations of poor corporate governance at the company in connection with its moves to get into the construction business.

Bowing to investor pressure, Satyam said last Wednesday that it had changed its mind about the proposed acquisition of two construction companies, Maytas Properties and Maytas Infra. Satyam had announced just the day before that it was investing in construction companies, in a bid to deliver higher shareholder value in an otherwise challenging environment.

Investors, however, pushed down the price of the company's shares by about 55 percent in trading on the New York Stock Exchange, as doubts were raised by analysts whether Satyam was justified in investing its cash in the construction business, even as its main outsourcing business was going through difficult times.

Investors were also annoyed that the Raju family, which has a dominant stake in Satyam, is a key investor in the construction companies.