Coforge chairperson Bhatt resigns after internal audit flags concerns over board evaluation

Bengaluru: Coforge shares dropped nearly 6% on the BSE after its chairman and independent director O P Bhatt resigned from the company’s board with immediate effect on Tuesday. This followed an internal audit review that raised concerns over the manner in which the company’s board evaluation exercise was handled and presented to the board.Coforge said the internal audit, conducted as part of its internal audit plan for the September quarter of the 2026-27 financial year, identified concerns relating to the Board Evaluation Report (BER). These concerns included that certain material information contained in or relating to the report and the chairman’s performance had not been fully disclosed to the board when the report was presented.The board subsequently raised its concerns with Bhatt and sought an explanation. Bhatt responded to the issues, but the board was still evaluating his explanation and had not taken any final decision when he tendered his resignation on September 8.“The Board considers it important to clarify that the Chairman’s resignation followed the concerns identified in the internal audit review and the subsequent process undertaken by the Board to seek and consider his explanation,” Coforge said in its regulatory filing.Bhatt, in his resignation email, said he had considered the matters raised concerning the board evaluation process and the circumstances that followed before deciding to step down.“I believe that continuing on the Board while there remains a disagreement considering the characteristics of my good faith actions in the Board evaluation process would not be conducive to the effective functioning of the Board,” Bhatt said. He added that the matters relating to the board evaluation process were the material reasons for his resignation and that there were no other material reasons.The resignation marks an immediate change at the top of Coforge’s board. The company said Bhatt would also cease to be a member of the board committees with immediate effect.Bhatt said he had served as an independent director and chairman with a “strong sense of responsibility” and had sought to discharge his duties independently and objectively, while balancing the interests of shareholders, management and the company.Coforge has designated Vivek Sharma, a non-executive independent director, as interim chairperson until January 31, 2027.The company’s filing also disclosed that Bhatt continues to serve as an independent director at Wockhardt Ltd, where he is a member of the audit, stakeholders’ relationship and capital raising committees.The development comes after the board evaluation process became the subject of an internal audit review. According to Coforge, the review was conducted under the company’s Q2 FY26 internal audit plan and covered, among other matters, the process followed for the board evaluation exercise under the chairperson’s guidance and the resulting report presented to the board.The company emphasised that the board had not reached a final decision on the concerns raised with Bhatt before his resignation. Bhatt, for his part, maintained that he had acted in good faith and said the continuing disagreement made it appropriate for him to step down.Recently, Recently, Coforge shareholders had earlier rejected the reappointment of OP Bhatt as an independent director at the company’s 34th annual general meeting on August 24. The resolution failed to secure the required majority for a special resolution, with 65.4% of shareholders voting in favour.Get the latest Business News and Live updates. Download the TOI app.