TCS Sacks 4 Employees After Rs 100-Crore Bribe-for-Jobs Scam

Tata Consultancy Services (TCS) has sacked four employees for violating its code of conduct after a Rs 100-crore bribe-for-job scam rocked the country’s largest IT services exporter on Friday.

TCS also sent the head of its recruitment division Resource Management Group (RMG), ES Chakravarthy, on leave and blacklisted three staffing firms that provided staff on a contractual basis.

First reported by Mint, the scam was unearthed after a whistle-blower informed CEO K Krithivasan and COO NG Subramaniam of the scam, according to two executives. This is the first recruitment scam to rock TCS since Krithivasan was appointed CEO on 1 June.

On Friday, TCS clarified that the “reference to the alleged scam in the recruitment process is incorrect”, PTI reported.

According to Mint, a few senior executives, including Chakravarthy, responsible for hiring thousands of important personnel had accepted bribes from staffing firms for years.

RMG, which has 3,000 employees, daily places around 1,400 engineers, including new ones, on projects. TCS hires experienced executives for IT services via employee referral programmes and staffing firms.

After the whistle-blower alarmed TCS, it constituted a three-member team, including chief information security officer Ajit Menon, to investigate the allegation.

Mint could not independently ascertain the names of the blacklisted staffing firms.

Chakravarthy, who joined TCS in 1997, is a vice-president. One of the executives told Mint that he reported to Subramaniam and has been debarred from coming to the office although his email ID is still active.

Mint sent an email to Chakravarthy seeking comment and a LinkedIn message to Arun GK, one of the sacked RMG executives but they didn’t respond.

A TCS spokesperson said, “While complaints regarding code of conduct violations arise from time to time, the company has robust processes for investigating and resolving them to closure.”

“The entire senior leadership is shocked,” an executive requesting anonymity as he is not authorised to speak with the media, told Mint. “This makes you question if there were enough guardrails, and how could such a thing happen.”

“The disturbing thing is that we don’t know how pervasive and for how long this scam was continuing. We only hired over 300,000 people, including contractors, in the last three years. Even if 10% of the entire recruitment was made through selected staffing firms and the staffing firm gave a commission on every person recruited, you can imagine the scale of this scandal,” he said. “I believe it will be, at least, Rs 100 crore.”

 In a late Friday evening filing with the exchanges, TCS said that its investigation found the allegation does not “involve any fraud by or against the company and no financial impact”.

“With reference to an article published in a media publication today, the company wishes to clarify that recruitment to TCS is not handled by the Resource Management Group (RMG) as alleged. Therefore, the reference to the alleged scam in the recruitment process is incorrect,” the Tata Group company said.

“RMG is responsible for allocating available resources to various projects and, in case, of any shortfall, fill such requirements through contractors. The complaint referred to in the article relates to the hiring of such contract resources employed by the contractors,” TCS added. “No key managerial person of the Company has been found to be involved.”

Meanwhile, Nascent Information and Technology Employees Senate (NITES), a Pune-based trade union of IT workers, drafting a letter addressed to the Ministry of Corporate Affairs and the Ministry of Labour and Employment seeking punitive action against the top TCS management.

NITES is seeking proper redressal for the employees likely impacted by this scandal, The Hindu BusinessLine reported.

NITES president Harpreet Singh Saluja told the newspaper that several employees who are on notice period at TCS and intending to work in other organisations soon are reporting difficulties transitioning as their credibility and credentials have been put into question as a result of the scandal.

“New employers are uncertain if these former employees bribed TCS to get employed,” he added.

“The IT sector is one of the largest employers in the country. Therefore, we seek that the government enforce some kind of accountability and transparency in how they hire new employees. Many families depend on the employment provided by the sector,” Saluja said.