By David Lawder
WASHINGTON (Reuters) - World Bank President Ajay Banga on Monday rejected allegations that the bank's International Finance Corp arm sought to cover up reports of sexual abuse at a for-profit school chain in Kenya in which it held a stake from 2013 to 2022.
Banga, asked during a Center for Global Development public event about the IFC's response to an independent investigation into the allegations at Bridge International Academies, said he disagreed with the characterization of a cover-up by the IFC.
Civil society groups have expressed concern that IFC ignored evidence of child sexual abuse at the some of Bridge's Kenya schools until the World Bank's Office of Compliance Advisor Ombudsman (CAO) received complaints from parents in 2018 and opened an investigation.
The IFC's Board of Executive Directors this month is expected to formally discuss an action plan following the CAO's findings related to the $13.5 million Bridge equity investment, which was divested in March 2022 as part of a plan to exit for-profit education.
The divestment came nearly a year before Banga was nominated for the World Bank's top job, but he will have to deal with its aftermath as he seeks to improve the lender's operations.
"I think there's a series of things management could have done better. And that's the discussion we're going to have with the board shortly," Banga said in response to an audience question on the matter.
"So I'm not going to pre-empt that. I just disagree that there was a legal effort to cover it up. That, I will not accept as a question," he added.
If a cover-up "is proven to be so, I will take all the action that is necessary, but merely conjecture that is in a public space, I will refuse to sign up. That's who I am, I'm sorry if you don't like it," Banga said.
Banga, a former Mastercard (NYSE:MA) CEO, took office in June with a mandate to shift the World Bank's mission to fight climate change and other global crises. He has pledged to make the World Bank nimbler and more focused on improving lives in the process.
Bridge did not immediately respond to a Reuters request for comment. The firm acknowledged some cases of sexual abuse in its Kenyan schools in a study it commissioned by the Tunza Child Safeguarding consultancy, but at rates far less than in Kenyan public schools.
SEEKING TRANSPARENCY
U.S. Senators Elizabeth Warren and Peter Welch asked Treasury Secretary Janet Yellen in a letter last October to take necessary steps to ensure that Kenya abuse allegations were thoroughly investigated.
A Treasury official said the department is "profoundly concerned, alarmed at the prospect that children may have been sexually abused in the context of an IFC project."
Treasury "vehemently condemns" violence against children and other human rights violations, the official said, and it will press for transparency and accountability in the investigation and seek policy changes based on lessons learned.
"Treasury has engaged IFC management and the CAO to understand what may have gone wrong given IFC's robust policies intended to prevent or detect any such harm. We likewise believe any threat to the independence of the CAO – be it in fact or perception – is unacceptable," the official told Reuters in an emailed statement.
'DEEPLY DISTURBED'
IFC Managing Director Makhtar Diop wrote in a letter to non-profit group Inclusive Development International in November that IFC was "deeply disturbed" by the reports of child sexual abuse," saying it "does not tolerate any form of abuse in the projects we finance."
Diop said the IFC was reviewing the CAO report into abuse at Bridge and would publish a plan for "remedial actions" when it is approved by the board. He said a confidentiality agreement between the IFC and Bridge - criticized by civil society groups - was designed to allow CAO to complete its investigation after the divestment.
Bridge International Academies operates hundreds of low-cost schools in Africa and South Asia with hundreds of thousands of students.