Doing Business Report suspended after investigation found China's ranking was inflated

Atlanta CNN Business The World Bank says it will stop publishing its annual Doing Business economic report after an independent investigation found bank leaders placed undue pressure on staffers to alter data to inflate the rankings for China and Saudi Arabia in 2018 and 2020 editions of the report.

The bank charged the law firm WilmerHale to conduct the investigation.

In 2017 investigators found that then-CEO Kristalina Georgieva pressured the Doing Business team to change the report's methodology or make specific changes to data points to boost China's ranking in 2018 edition.

This came after Chinese government officials repeatedly expressed concerns to her and then-World Bank President Jim Yong Kim over the country's ranking, according to 16-page investigation released by WilmerHale.

At the time, Georgieva was in the middle of negotiations over a capital rise campaign in which China was expected to play a key role, the investigation found.

Georgieva was directly involved in improving China's ranking according to the independent investigation, which said that during one meeting, the then-CEO chastised the Central Bank's then-Country Director for mismanaging the bank's relationship with China and failing to appreciate the importance of the Doing Business Report to the country. Doing Business Team Leaders eventually increased China's ranking in the survey by seven places to 78 by changing data points they could modify, including giving the nation more credit for a Chinese secured transaction law, according to WilmerHale Report.

In October 2017 the investigation found that aides to Kim also directed the survey team to simulate how China's final score could change if data from Taiwan and Hong Kong were included into the country's existing data. The WilmerHale report says that the 'Doing Business' Team leaders thought that the concern was directly coming from President Kim. Georgieva, who is now the managing director of the International Monetary Fund, said in a statement that she disagrees fundamentally with the findings and interpretations of the Investigation of Data Irregularities as it relates to my role in the World Bank's doing business report of 2018, and that she has briefed the IMF's Executive Board on this matter.

The IMF executive board has asked the Ethics Committee to review the WilmerHale investigation, according to a source familiar with the matter. The ethics committee will then report back to the board with their assessment.

During a press briefing on Friday, the Chinese Foreign Ministry Spokesperson Ms. Zhao Lijian said, Mr. Georgieva has issued a statement on the official IMF website. I would refer you to relevant authorities for further information. We also highlighted that the World Bank has issued a statement on suspending the Doing Business Report. The Chinese Government attaches great importance to the efforts of Doing Business of improving business environment, which is evident to all. We hope that the World Bank will take facts as base, rules as criterion, follow the professional, objective, fair and transparent principles to conduct a thorough investigation into relevant issues in strict conformance with the internal review procedures, so as to greater safeguard the credibility and professionalism of the Doing Business report and the credibility of the World Bank itself and its member countries' reputations. The WilmerHale investigation found also irregularities relating to Saudi Arabia's data in the 2020 Doing Business Report. Saudi officials expressed displeasure over how the country ranked in the 2019 edition, especially with the survey team's failure to recognize what officials saw as the country's successful reforms, according to the investigation.

As a result, senior bank leaders, including one of the founders of Doing Business Report, Simeon Djankov, instructed the survey team to find a way to alter the data so that Jordan won't rank first on its so-called Top Improvers list. The team eventually added points in multiple categories to Saudi Arabia so that the country would replace Jordan in the top spot according to the results of the investigation.

Djankov said that the demand for Saudi Arabia to change its data came from two Senior World Bank officials, one of whom previously served as Chief of Staff to President Kim and was involved in changes to China's data in the 2018 edition of Doing Business, the investigation found.

In a statement released on Thursday the World Bank said it would discontinue the Doing Business report. The World Bank Group remains firmly committed to developing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this. Going forward, we will be working on a new approach to assessing business and investment climate, the statement added.

CNN has reached out to the Saudi Embassy in Washington D.C and the Saudi ministry of foreign affairs for comment and is awaiting a response.

CNN has also reached out to Peterson Institute for International Economics and Simeon Djankov where he works as a senior fellow on comment.