Tata Consultancy Services Ltd., which added 50,000 employees annually on average over the past three years, has been rocked by a scandal after the technology giant learned that a small number of senior executives who were in charge of hiring tens of thousands of key employees had compromised the hiring process by accepting bribes from staffing agencies.
TCS Takes Swift Action against Accused Officials
Although the specifics of the scam are vague, two executives who are aware of the developments claimed that a whistleblower had claimed that E.S. Chakravarthy, the global head of TCS’s resource management group (RMG), the company’s recruitment division, had been accepting commissions from staffing companies for years in a communication to the company’s chief executive officer and chief operating officer. In response to the complaint, the business immediately assembled a team of three officials, including Ajit Menon, the company’s top information security officer, to look into the claims. After several weeks of investigation, TCS blacklisted three staffing companies, fired four RMG officials, and sent the head of recruiting on leave. One of the two executives mentioned above claimed that although the company has not yet determined the extent of the irregularities, those participating in the scheme may have made at least $100 crore in commissions.
VP Chakravarthy Barred, Silence Surrounds Fired Executive Arun G.K.
Vice President Chakravarthy began working for TCS in 1997. The executive added that although his email ID is still active, he reported to Natarajan Ganapathy Subramaniam, the chief operations officer, and has been prohibited from visiting the office. An email seeking comment sent to Chakravarthy on Monday went unanswered, and a LinkedIn message to another executive, Arun G.K., who oversaw a department in the RMG division and was fired, also received no response. Nearly 1,400 engineers, including new hires, are placed on projects everyday by the RMG division, which has an estimated 3,000 employees and averages one placement per minute. With 614,795 people and $27.93 billion in sales at year’s end, TCS. Employee referral programmes and staffing agencies are the two most popular ways for IT services companies like TCS to hire experienced executives. Staffing companies are used to hire contractors and temporary labour. This news comes after K. Krithivasan took over as the company’s chief executive on June 1. It is the first of its kind recruitment scandal to affect TCS.
Shockwaves as Hiring Scam Exposes Gaps in Corporate Governance
Major organisations are expected to have strong measures in place to prevent corruption that could impede operations and damage their reputation, thus the revelation caught everyone off guard. “Small businesses with perceived inadequate corporate governance frequently experience this. However, it is unexpected to hear of this hiring scam at a company like TCS. Simply because all major corporations have strict audit procedures in place, and no executive is given sufficient authority to abuse it, according to an executive at a Bengaluru-based business.
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