IT services giant Tata Consultancy Services (TCS) has confirmed that it took action against six employees after finding them favouring a few staffing firms in incidents that recently became public.

In an annual general meeting, chairman N Chandrasekaran said six employees and six business associates (recruitment firms) had been banned. An investigation on three more employees is ongoing.

According to the Press Trust of India, in February and March, TCS received two whistle-blower complaints alleging misconduct by certain employees from the resource allocation group. Both complaints were investigated. Chandrasekaran said the issues were in India and in the US.

About 2%-3% of the overall resources the resource allocation group deploys are such business associates, Chandrasekaran said, adding that there are 1,000 such staffing firms empanelled with the company across 55 countries.

“This complaint was against certain people in the company working with certain BA (business associates) firms recruiting in their favour,” Chandrasekaran said. “We found six employees who did not follow the ethical conduct. While we cannot quantify the favours they received, they behaved in a way that they were favouring certain firms. So we have banned those six employees and also six companies. Investigations are pending on three more employees.”

The company did not provide any details about the employees or their designations. However, earlier media speculation did name a number of senior executives that had been implicated. The company said the activity was a breach of its code of conducts but did not involve fraud by TCS or key managers.

Fraud is generally understood to have occurred when a person dishonestly makes a false representation in order to gain for themselves or cause loss to another. How the company has determined that employees receiving unspecified favours in return for preferential treatment of some of its staffing suppliers is only a breach of a code of conduct and not fraud is unclear.

“The company will look at the entire BA supplier management process and see what the weaknesses are and will tighten the process to ensure we do not face such incidents,” Chandrasekaran added.

Commenting on future expectations, Chandrasekaran added that the next two quarters will be volatile due to business uncertainties in the developed world, but the company has good prospects in the medium to long term.