TCS writes to board members about details on recruitment scam allegations

TCS is consulting with external auditors to investigate the situation, said a person aware of the development

Tata Consultancy Services (TCS) has officially written to each member of its board to inform and clarify the claims of a recruitment scandal at the largest software services company in the nation, said an Economic Times (ET) report.

One of TCS' directors told ET that even though the investigation is still ongoing and the final report is still awaited, the initial reading suggests that subcontractors are a very small percentage of the overall workforce of TCS and the claims are "ridiculously exaggerated."

"This is not an issue related to hiring of employees of TCS, but with the contractors of TCS, there are claims that the amount involved is Rs 100 crore, it is not even remotely close to it," said the board member speaking off the record.

Meanwhile, TCS is consulting with external auditors to investigate the situation, said another source.

TCS was notified that senior executives were violating the corporate code of conduct by giving preferential treatment to some recruiters at the company's RMG (Resource Management Group) division.

The incident was discovered following a whistle-blower complaint near the end of April or the first week of May, and the investigation is nearly complete, said another official aware of the development.

TCS said in a statement on Friday, “On receipt of the complaint, the company launched a review to examine the allegations in the complaint.”

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Based on the review, TCS found that “this does not involve any fraud by or against the company and (has) no financial impact”.

It also said no key managerial person of the company has been found to be involved.

“The issue relates to breach of the company's code of conduct by certain employees and vendors providing contractors,” it said.

TCS further stated that RMG is responsible for allocating available resources to various projects and, in the event of a shortfall, filling such requirements through contractors.