Tata Consultancy Services (TCS) has been hit by a recruitment scandal after senior executives at the country’s largest IT services firm were reportedly found to have accepted bribes from staffing firms.
There was no response or clarification from the company in the form of a regulatory filing at the time of writing this report.
Media reports said a whistle-blower had written to TCS CEO and MD K. Krithivasan and chief operating officer N. Ganapathy Subramaniam alleging that E.S. Chakravarthy, the global head of the company’s resource management group (RMG), which is its recruitment division, had been accepting commissions from staffing firms for years.
After the complaint, TCS drew a team of three executives, including chief information security officer Ajit Menon, to look into the allegations and after weeks of investigation, the company reportedly sent the head of recruitment on leave.
It also sacked four executives from RMG and blacklisted three staffing firms. It is learnt that the RMG division hires for only temporary roles which form a very small portion of the company’s total employee base.
Although TCS is yet to ascertain the scale of the irregularities, the report claimed that people involved in the scam may have earned at least Rs 100 crore through commissions.
The recruitment scandal has come as the first challenge before Krithivasan who had donned the CEO’s role earlier this month.
According to regulation 30 of Sebi’s Listing Obligations and Disclosure Requirements, or LODR, every listed company should make disclosures of events or information which in the opinion of its board is “material’’.
It could not be ascertained if the development is material with regard to the earnings of the company. Market circles here said that in such cases, companies also refer such complaints to it audit committee, and TCS could have done that as well.
Chakravarthy, who reportedly holds the rank of vice-president, joined TCS in 1997. He reported to Subramaniam and has been debarred from coming to the office.
Shares of TCS On Friday ended at Rs 3,217.45 on the BSE — a drop of 0.66 per cent over the last close.
