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Coforge Falls 6% After Chairman OP Bhatt Quits Board

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Coforge shares slid nearly 6% after chairman OP Bhatt resigned following an internal audit that flagged issues with the board evaluation report.

Shares of IT services firm Coforge fell close to 6% on the BSE on Tuesday after OP Bhatt stepped down as chairman and independent director with immediate effect. The departure came after an internal audit review raised questions about the way the company handled and presented its board evaluation exercise.

Bhatt, who took over as Coforge chairman in 2024, had earlier led the State Bank of India as its chairman between 2006 and 2011. He submitted his resignation on September 8, while the board was still weighing his response to the audit's findings.

According to a regulatory filing, the audit was carried out as part of Coforge's plan for the September quarter of FY26. It flagged problems with the Board Evaluation Report, including the failure to disclose certain material information about the report and about the chairman's own performance when the document was placed before the board.

The board had put these concerns to Bhatt and asked him to explain. He replied, but no final call had been taken when he chose to step aside. "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," the company said.

In his resignation email, Bhatt tied his exit directly to the evaluation dispute. "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," he wrote. He said these matters were the material reasons for leaving and that no others applied.

Bhatt also defended his conduct, saying he had carried out his role as independent director and chairman with a "strong sense of responsibility" and had tried to act independently while weighing the interests of shareholders, management and the company.

Coforge has named non-executive independent director Vivek Sharma as interim chairperson, a role he will hold until January 31, 2027. Bhatt will also step down from all board committees at once.

The resignation follows a bruising shareholder verdict last month. At the company's 34th annual general meeting on August 24, a special resolution to reappoint Bhatt as an independent director drew 65.4% of votes in favour and 34.5% against, short of the majority it needed to pass.

Governance analysts pointed to friction with Coforge's biggest investor. "It looks like disagreements on strategy and policy matters between the chairman and the largest shareholder, Advent, seem to have led to this resignation," said Shriram Subramanian, managing director of corporate governance research firm InGovern Research Services. He noted that the proposal to reappoint Bhatt from May 2027 was rejected at the August 24 meeting, with Advent voting against it.

Coforge, OP Bhatt, Coforge share price, board evaluation report, Vivek Sharma, Advent, InGovern, corporate governance

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