Bribe for jobs: TCS fires 16 staffers, former head of RMG

E.S. Chakravarthy, the former head of TCS’s resource management group, who was accused of misconduct in hiring contract workers by two separate whistleblower complaints in February and March and sent on leave on 18 April, has now been sacked by the company, according to an executive privy to the development.

On Sunday night, TCS disclosed to the exchanges that it had sacked 16 employees and blacklisted six staffing firms.

“Our investigation found 19 employees to be involved, and action has been taken against all as detailed here - 16 employees have been separated from the company for code of conduct violations, and three employees have been removed from the resource management function," TCS said in a filing to the exchanges. “Also, six vendor entities, their owners and affiliates have been debarred from doing any business with TCS. Further, TCS would continue to enhance its governance measures, including a) regular rotation of personnel performing key roles in the resource management function, b) enhanced analytics on supplier management, c) periodic declarations by vendors on compliance with the Tata Code of Conduct and know your supplier process to cover additional declarations, and d) Vendor management process audits."

A text message sent to Chakravarthy seeking comment went unanswered.

In a post-earnings interaction with reporters last Wednesday, TCS chief executive K. Krithivasan said, “We have completed our investigation. We have taken appropriate action against whosoever had violated the code of conduct. All actions have been taken, and it is closed."

“All the suggested actions on what we should do from a process, from technology, from a people standpoint, all these actions are very well documented, and I will not get into these for now, but we will look into all these aspects," said TCS’s chief human resources officer, Milind Lakkad, in response to another question during the press meeting.

According to two executives privy to the development, TCS is implementing three key things. First, it is enforcing a time-bound tenure and rotational policy for executives in senior roles inside RMG, capping a leader’s tenure.

Second, TCS has set up a panel that will green-light hiring. Until now, a talent acquisition (TA) team under the HR department would have helped recruit people whenever a business unit head raised the request for people. Under the new policy that is being implemented, the HR team would have to seek the approval of a panel, which would decide on the maximum number of temp workers and permanent staff that could be hired.

Finally, staffing companies have been asked to use Ultimatix, TCS’s internal enterprise resource planning platform, to provide details of contract workers they wish to deploy and not use emails.

“There will not be any personal meetings (between RMG executives and staffing firms). TCS has also set up a region-wise nodal point of contact who can be contacted by vendors for any escalations," said the head of a Bengaluru-based staffing firm.

After Mint reported the bribes-for-jobs scam, Tata Sons chair N. Chandrasekaran expressed anguish and promised shareholders at TCS’s annual general meeting that the company would take stringent measures to improve how it engages with the network of over 1,000 staffing firms.

Before he was suspended, Chakravarthy reported to TCS’s chief operating officer, N. Ganapathy Subramaniam. TCS entrusted Sivakumar Viswanathan, a veteran of about 30 years, as the new head of the resource management group (RMG) after the scandal surfaced.

The RMG division deploys 608,985 employees across thousands of ongoing projects and also recruits contract workers. Inside TCS, RMG puts almost 1,400 engineers into projects daily, averaging one placement every minute.

By July, TCS blacklisted six staffing firms, including Foray Software Pvt. Ltd, Taltech Technologies Pvt. Ltd, IDC Technologies, Tech Orbit, USG Inc. and its Indian unit, Stratosphere IT services.

Chakravarthy’s first cousin, Rakesh Edupuganti, is director of operations at Foray Software, while Chakravarthy’s wife is related to the wife of Taltech’s co-founder Kranthi Sagar, relationships that were never disclosed to the company in the past and which allowed these firms get preferential treatment when it came to hiring of temp workers from these firms, according to three executives privy to the development, Mint reported on 5 July.

Until last year, Taltech and Foray Software emerged as the biggest contract staffing firms for TCS in south India, according to an earlier Mint investigation.