BENGALURU: Coforge shares dropped nearly 6% on BSE after chairman and independent director OP Bhatt resigned from the company’s board with immediate effect on Tuesday. The resignation followed an internal audit review that raised concerns about how the company’s board evaluation exercise was handled and presented. Bhatt became chairman of Coforge in 2024. He previously served as chairman of State Bank of India from 2006 to 2011.Coforge said the internal audit, conducted as part of its plan for the Sept quarter of FY26, identified concerns relating to the Board Evaluation Report (BER). These included the non-disclosure of certain material information relating to the report and the chairman’s performance when it was presented to the board.The board subsequently raised its concerns with Bhatt and sought an explanation. While Bhatt responded, the board was still evaluating his explanation and had not taken any final decision when he resigned on Sept 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.In his resignation email, Bhatt said he had considered the matters raised concerning the board evaluation process and the circumstances that followed.“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. 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 non-executive independent director Vivek Sharma as interim chairperson until Jan 31, 2027. Bhatt will also cease to be a member of the company’s board committees with immediate effect.The resignation follows a shareholder vote last month in which investors rejected Bhatt’s reappointment as an independent director. At the company’s 34th annual general meeting on Aug 24, the special resolution received 65.4% votes in favour and 34.5% against, failing to secure the required majority. “It looks like disagreements on strategy and policy matters between the chairman and the largest shareholder, Advent, seem to have led to this resignation.“The reappointment of OP Bhatt effective May 2027 put to vote at the Aug 24 AGM was voted against, with Advent, the largest shareholder voting against,” said Shriram Subramanian, MD of corporate governance research firm InGovern Research Services.
