TCS concludes jobs-for-bribes investigation, sacks 16 employees, moves three others
In today’s episode find out why TCS sacked 16 employees, but first a few headlines. Headlines After losing the IPL streaming rights, which has contributed its loss of some 20 million subscribers, Disney Hotstar set a new world record for concurrent viewers on Saturday when 35 million people logged on to the digital platform to watch the India-Pakistan cricket match in the ICC World Cup. Apple may announce new iPads tomorrow, 9to5Mac reported over the weekend. The iPad Air, iPad mini and the base model iPad are expected to be refreshed with incremental improvements to their specifications, according to 9to5Mac. One thing today Tata Consultancy Services, India’s biggest IT services company, has concluded an internal investigation into complaints of jobs-for-bribes with respect to hiring contract workers, the company told the stock exchanges in a statement yesterday. TCS has sacked 16 employees and moved three others, based on the findings of the probe, the company said in its statement. Many of you will remember an investigative piece by Mint Newspaper from June that brought to light a jobs-for-bribes investigation within Tata Consultancy Services, India’s biggest IT services company. And you’ll remember that a week later, at the company’s annual general meeting of shareholders, Tata Group Chairman N Chandrasekaran confirmed that an investigation was on, based on two whistle blower complaints that had been received in February this year – one pertaining to India and the other in the US. We learned that this was about certain company executives favouring certain firms that supplied ‘business associates’ in return for bribes, which at that point had not been quantified. We’d also learnt that the staff involved were from a team called the resource allocation group or the resource management group – dealing with some 1,000 staffing firms that provided business associates in 55 markets. Yesterday, the company reported that its investigation found 19 employees to be involved. Of those 16 employees have been separated from the company for code of conduct violations, and three have been removed from the Resource Management function. TCS hasn’t provided details about the involvement of the three who remain with the company but have been moved to different roles. And six vendor entities, their owners and affiliates have been debarred from doing any business with TCS. The company is putting in place additional governance measures including regular rotation of personnel holding key roles in the Resource Management function; better analytics on supplier management; periodic declarations by vendors on compliance to the Tata Code of Conduct and a know-your-supplier process to cover additional declarations, and audits of the company’s vendor management process. In its statement to the stock exchanges yesterday, TCS said again that there’s been no fraud by or against the company and there is no financial impact, reiterating its first statement on the issue, after the Mint newspaper article on June 23. According to TCS, what happened was a breach of the company’s code of conduct by certain employees and vendors supplying contractors. No key managerial person of the company has been found to be involved. It’s been something of a bumpy ride for TCS this year. First, Rajesh Gopinathan, Chandrasekaran’s protégé, abruptly resigned from the post of CEO in March, and then this investigation became public. TCS will be looking to put this chapter firmly behind it. K Krithivasan, who replaced Gopinathan as CEO, is a company veteran of 30 plus years. Previously he led TCS’s biggest business unit – banking, financial services and insurance. He may now get a chance to look ahead and focus on growth at a time when the crisis in the Middle East has made the outlook for the sector even more uncertain amid a global economic slowdown, while concerns about a US recession seem to be easing.