You may have heard of bribery for government jobs, but have you ever heard of paying a bribe to secure a job in the private sector? Probably not, but it happened, and it’s even more surprising that it occurred in the IT sector within a large-cap company like TCS. Yes, there’s a TCS job scam (rather was!), and here we will tell you all about it –
Let’s get into the details of this scandal – TCS Job Scam
How did they discover something fishy was going on?
In February and March 2023, two whistleblowers sent complaints via email to TCS’s CEO and COO about this scam. TCS promptly initiated an internal investigation.
On June 23, 2023, in their stock exchange filings, TCS stated that their Resource Management Group (RMG) does not engage in any recruitment activities for their company. RMG’s sole responsibility is to allocate available resources for projects, and that too during resource shortages, which is handled by contractors. All other hiring is managed by their HR and Talent Acquisition departments.
On June 29, during their Annual General Meeting (AGM), TCS Chairman N. Chandrasekaran confirmed that the company had initiated an investigation related to the job scam. They had also let go of 6 employees and 6 staffing firms. This was first reported by LiveMint.
What’s the Estimated Value of this TCS Job Scam?
According to reports, this scam is estimated to be around Rs 100 crore (approximately $13 million). Well, because this has been going around from quite some years!
How did this Scam Work?
TCS employees were allegedly accepting bribes from recruiting agencies to place people in jobs, all without the company’s knowledge. Staffing firms were allegedly providing money to senior executives to secure jobs for individuals.
Job Scam in TCS: How Long Had This Been Going on?
It’s not precisely clear, but the whistleblower mentioned that the company’s Resource Management Group had been accepting money from staffing firms for several years.
What actions did TCS take? After an internal investigation lasting around 6 months, TCS terminated the employment of 16 employees and removed 3 employees from the resource management function. Additionally, 6 vendors were fired, and their owners and affiliates were barred from conducting any future business with TCS.
Has such a thing happened before in the corporate world? No reported scams match this exactly, but staffing firm Meraqui’s CEO mentioned that such scams occur because the industry is unorganized. He explained that due to the rising demand and shrinking margins, IT firms often rely on flexi-staffing, which can sometimes lead to issues.
Will this affect TCS’s stock shares? There’s no evidence of any financial or other fraud by the company itself. Besides, no key managerial position holder are involved. Furthermore, TCS is strengthening its governance in various areas, such as regular rotation of personnel in the resource management function, enhanced analytics on supplier management, and vendor management process audits. So, it’s likely that this TCS Job scam and scandal won’t significantly impact the company’s shares.
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