HCL Tech drawn into the WSJ controversy

Indian IT services firm HCL Technologies has been sucked into a controversy after a foreign newspaper major reported the tech vendor’s alleged involvement in what it terms as the Wall Street Journal ‘circulation scam’.

UK’s The Guardian newspaper reported yesterday that it had found evidence that News Corporation’s flagship newspaper, the Wall Street Journal (WSJ) had been channelling money through European companies to buy its own paper at a knock-down rate. And that this helped the WSJ to inflate circulation.

The report says the WSJ was doing this using some other companies, including HCL Technologies, though these companies were not aware of it. The Guardian reported that in one such case, HCL Technologies was used to channel money to a Dutch company Executive Learning Partnership (ELP) responsible for 16 per cent of the WSJ’s European circulation.

The Guardian also reported that HCL had agreed to pay the WSJ €16,000 to organise a special event at the Grosvenor House hotel in London on September 30, 2010.

It was then proposed that instead of paying the Journal, HCL should pass some of this money to a middleman — a Belgian publishing company — who would then pass it on to ELP, according to the Guardian report.

When Business Standard contacted HCL, the company confirmed that they did sponsor a WSJ Europe event on September 30, 2010 in London. However, the company declined to share further details on the payment mode saying, “We cannot comment on the contents of the article about the WSJ’s operations, as this is a matter for WSJ to respond.”

This is the second controversy for the company in recent months. Earlier this year, there were allegations that HCL Technologies participated in deletion of email data in the News Corp phone hacking case.