Ethical code was breached in TCS hiring case: Tata Group chairman Chandra

MUMBAI/BENGALURU: Tata Group chairman N Chandrasekaran on Thursday broke his silence on the bribe-for-job scandal, which is threatening to turn into a reputational setback for the conglomerate, especially as it follows the Air India ‘peegate’ episode.
He admitted at the TCS annual shareholders’ meeting that there was a breach of the group’s ethical code and that six employees from the company were involved.

The chairman said that all the six have been banned and investigation is pending for three more employees. He didn’t give any details about the employees or their designations. The company has also banned six business associate (BA) firms. These are contract staffing vendors.
“We can’t quantify what favours they (read TCSers) got but they were favouring certain business associate firms,” said Chandrasekaran in his reply to shareholders’ querieson the recruitment bribe scam that came up during the IT giant’s annual general meeting (AGM) on Thursday. A report by a business daily estimated that the total amount of bribes collected could be to the tune of Rs 100 crore.
Chandrasekaran said, “We are looking at the entire BA supplier management processes and see what the weaknesses are, and will plug them to ensure we don’t have such incidents.”
TCS has two departments for acquiring talent, one is the HR & talent acquisition group, which oversees the hiring function, and the other is the resource management group (RMG), which allocates available resources to various projects. But, whenever there is a talent shortage or a particular skill is not available in a location, RMG fills such requirements through BA firms which gets the company temporary workers. RMG works with a little over 1,000 BA firms across the globe “as it needs resources in 55 different countries”.
Chandrasekaran said the wrongdoings at its India and US units were pointed out by two whistleblowers towards the end of February and March. The complaints were about certain favouritism done and favours received in recruitment of BA firms. “They were related to certain individuals in the company working with certain BA firms to be recruiting in their favour.”
TCS’s expenses towards external consultants, a majority of which relate to subcontracting, rose 23% in fiscal 2023 to Rs 21,337 crore.
“For a Tata Group company, the most important thing expected of every employee is ethical conduct and integrity in operations. That comes ahead of any financial performance. Whenever there is a violation of ethical conduct by any employee… we take it extremely seriously and will take very strong actions. ” Chandrasekaran said the investigation in India is done by asenior officer of the company and in the US, it is done by an external firm.
With lot of shareholders asking about the demand environment, Chandrasekaran said, “When there is uncertainty in the global economic situation due to higher inflation or slowing of growth, companies will calibrate spending…” However, cloud, IoT, predictive AI and generative AI are “trends that augur extremely well”.