The company, in an exchange filing on October 15th, stated that following an investigation into allegations of bribery and corruption related to the job of its IT chief, Tata Consultancy Services (TCS) has terminated sixteen employees and removed three others from their roles after months of scrutiny into practices where staffing firms were allegedly involved in giving bribes to senior officials overseeing recruitment processes at the company.
This has resulted in a total of 19 employees facing actions – with 16 being terminated for violations of the company’s code of conduct and three being removed from their roles related to resource management activities, as detailed in the exchange filing.
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The company further explained that it will continue to strengthen its governance measures by implementing regular rotations for key personnel in resource management, enhanced supplier management scrutiny, periodic disclosures by vendors of compliance with the Tata Code of Conduct, and keeping its governance practices updated through additional disclosures and vendor management process audits.
The company clarified that this issue does not involve any financial wrongdoing, and no senior management personnel were implicated in these actions.
In a press conference held after the announcement of the second quarter results, CEO Kritivasan said, “We have completed our investigation. We believe that anyone who has violated our code of conduct, we have taken the necessary action against them. Actions vary depending on the nature of the violation, but they have all been concluded and closed.”
When questioned about what steps the company was taking to ensure that such incidents do not recur, Chief Human Resources Officer Milind Lakkad mentioned that the company was reevaluating its organizational, people, processes, and technical aspects, but such changes were not fully realized yet.
How Did This Unfold?
This case first came to light on June 23, 2023, when an internal whistleblower complaint led TCS to state in its stock exchange filing that RMG (Resource Management Group) did not handle any of TCS’s hiring activities and was solely responsible for allocating available resources to various projects. In cases of resource shortages or specific skill requirements that are not locally available, TCS has a set of BAFs (Business Associate Firms or Staffing Firms) to hire contract employees.
“Resource allocation at any point in time includes roughly 2-3% of BAFs. The complaint was related to a few individuals within the company who were working to hire from some BAFs,” explained Chandrasekaran.
He said, “There are a large number of BAFs with which TCS works. There is a rigorous process within the company to hire or qualify a firm as a BAF. Globally, there are over 1,000 such firms because we need resources in about 55 countries, and each operates a certain volume of business based on its availability of skills.”
In conclusion, TCS has taken measures to address this issue, with a focus on strengthening internal governance and ensuring compliance with its code of conduct, but the full scope of changes remains to be seen.
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