While addressing the alleged recruitment scam, India’s largest IT services company, Tata Consultancy Services (TCS), said that the scandal does not involve any fraud by or against the company or its key managerial personnel and holds no financial impact. However, the issue relates to a breach of the company’s Code of Conduct by certain employees and vendors providing contractors. 

The recruitment activities at TCS are not handled by the Resource Management Group (RMG), contrary to the allegations made, the company stated in an exchange filing. RMG’s responsibility is allocating resources to various projects and filling any resource gaps through contractors. The complaint mentioned in the article pertains to hiring contract resources employed by the said contractors.

A whistleblower communicated with TCS’s CEO and COO, alleging that E.S. Chakravarthy, the global head of TCS’s resource management group, had been accepting commissions from staffing firms for an extended period. Reports indicate that TCS has taken action against the employees and vendors involved, blocking certain human resource vendors and terminating the employment of some individuals. 

With a $1 billion turnover IT company, the workforce cost accounts for around 60% ($600 million). Contract employees, constituting 15% of the personnel, incur a cost of about $90 million annually. Even a one per cent bribe on these amounts would be substantial.

Experts have voiced concerns about the impact of this bribery scandal on TCS’s reputation and the overall quality of personnel working on projects for Indian IT majors. They believe clients and other IT companies may question individuals’ capabilities in various projects.