TCS gets external auditor to assist investigation of jobs-for-bribe scandal

Sources say probe will take 45 days to complete; company tells exchanges scam had no financial impact

The legal team of Tata Consultancy Services (TCS) is working with an external auditor to investigate a jobs-for-bribe scandal at India’s largest IT services firm, sources said.

Governance counsel Madhav Achan and senior TCS executives are part of the investigation but the name of the external auditor could not be confirmed. According to a media report, Sivakumar Viswanathan is the new head of the company’s Resource Management Group (RMG), the department at the centre of the scandal.

The investigation will take 45 days to complete and further decisions will be taken after that, said a senior executive, who did not wish to be named. “So far four people have been sacked and three HR firms have been blacklisted,” said this person.

Meanwhile, TCS’s sacking of a few HR firms means the business could go to other larger vendors. Four large HR recruitment firms told 'Business Standard' that TCS had approached them. “Earlier we would be after TCS, now we are getting calls for a few days if we can take on more mandate,” said a senior executive of a US-based HR executive search firm.

TCS works with some 10-15 HR vendors, apart from its internal recruitment team for hiring. With the black-listing of a few firms, the work is now getting pushed to other larger HR recruitment firms.

An email sent to TCS did not receive a response till the time of publishing the story.

RMG, whose executives are under scrutiny, is in charge of allocating and deploying people within the company and not for the mass recruitments that the company does. “A small percentage, around 1 per cent or so of sub-contractors or just-in-time recruitment is done by this team,” said a source.

TCS, in a filing to the exchanges, said the involvement of senior executives and vendors in 'bribes for jobs' is a breach of the company's code of conduct. It also said the scandal has no financial impact and does not involve any fraud.

“The recruitment activities in TCS are not handled by the Resource Management Group (RMG) as alleged, therefore the reference to alleged scam in recruitment process is incorrect. RMG is responsible for allocation of available resources to various projects and incase of any shortfall, fill such requirements through contractors. The complaint referred to in the article relates to hiring of such contract resources employed by the contractors,” said the company last week.