Coforge Chairman Bhatt Resigns Amid Concerns Over Board Evaluation Process, Co Says No Bearing On Biz

Coforge Chairperson O P Bhatt resigned abruptly from the company after an internal audit raised concerns over the manner in which a 'board evaluation report' was handled, the IT firm disclosed on Wednesday, while asserting that the move will not have any bearing on the financial or operational performance.

The Coforge scrip tanked in the aftermath of the disclosure made through a clutch of BSE filings which stated that the internal auditor's review of the process followed in relation to the 'Board Evaluation Exercise' had identified certain concerns over the manner in which the BER had been dealt with, and presented to the board.

"Certain material information contained in or relating to the BER and the performance of the chairman had not been fully disclosed to the Board when the BER was presented," Coforge added.

The company immediately rushed to clarify that the Board Evaluation Exercise conducted in March/April 2026, for the previous year, "does not in any way relate to the financial statements or financial reporting or to any financial matters of the company". Nor does it have any bearing on the company's operations, business performance and near-term, medium-term or long-term stated guidance, the mid-tier IT company asserted.

Such matters, it added, solely relate to the Board Evaluation Exercise which is a regulatory requirement.

In another regulatory filing, Coforge said "members of the Board of the company have noted the resignation of Non-Executive Independent Director and Chairperson of the Company, O P Bhatt with immediate effect".

Coforge explained that as part of the internal audit plan for Q2 FY26, the company's internal auditor reviewed the process followed in relation to the Board Evaluation Exercise under the guidance of the Chairman and the resulting Board Evaluation Report (BER) presented by the Chairman to the board.

In simple terms, a board evaluation report refers to a document that assesses performance of the board members.

"The review identified certain concerns in relation to the manner in which the BER had been dealt with and presented to the board," Coforge said, adding certain information relating to the BER and the performance of the Chairman had not been fully disclosed to the board.

Following these observations, the board raised concerns and sought an explanation from Bhatt over issues identified in the review.

The filings, however, did not offer any detail on the specific concerns that had been flagged, or what the particular gaps in disclosures were all about.

The company further said Bhatt responded to the issues raised, and the board was in the process of considering and evaluating his explanation and had not taken any final call in the matter.

In his defence, Bhatt, a former chairman of SBI, maintained that he had acted in good faith, but tendered his resignation from the board with immediate effect on September 8, 2026.

"This is not a decision I have taken lightly," Bhatt wrote in his resignation letter.

Coforge emphasied that the resignation followed the concerns identified by the internal audit and the subsequent process undertaken by the board to seek and consider his explanation.

Tendering his resignation, Bhatt wrote: "I have carefully considered the matters raised with me concerning the Board evaluation process, my response to those matters, and the circumstances that have followed. After such consideration, I have concluded that it is appropriate for me to resign from the Board of Directors of the company, with immediate effect".

Bhatt said he had served the company as an Independent Director and Chairman with a strong sense of responsibility and always sought to discharge duties independently, objectively and in the best interests of the company and all its shareholders.

He said his record reflects efforts to maintain a balance between the interests of shareholders, management and the company.

"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 said.

Bhatt said the matters he had referred to in his letter were the exact material reasons for the resignation, and added "I confirm that there are no other material reasons for my resignation". The same message also resonated in the company's filings related to Bhatt's resignation.

"There is no other material reason for his resignation other than the reason stated in his resignation email dated September 8, 2026," Coforge said.

Bhatt was named the Chairman of Coforge in June 2024 for a three-year term that would have ended in April 2027.

With the resignation, Bhatt also ceases to be a member of the company's board committees.

The Coforge board has designated Non-Executive Independent Director Vivek Sharma as interim Chairperson until January 31, 2027.

Seeking to delink the latest intimation and disclosures from the financial matters of the company and business outcomes, Coforge said "the company is making this clarification to avoid any misunderstanding that the matters relating to the board evaluation exercise have any connection with the...financial performance, financial reporting or business operations".

The company's stock pared some losses and ended 5.2% lower at ₹1,846.90 on the BSE.