Coforge chairman O P Bhatt has resigned from the company’s board with immediate effect after an internal audit raised concerns over the handling and disclosure of information linked to its board evaluation process.
The resignation came as a surprise to investors and sent Coforge shares sharply lower in Wednesday’s trading session. The stock fell around 7% in early trade before recovering some ground. Business Standard reported the shares were down about 5.35% at ₹1,845 in morning trade.
Bhatt, a veteran banker and former chairman of the State Bank of India, stepped down as both Non-Executive Independent Director and Chairman. His resignation was accepted immediately, and he has also ceased to be part of all board committees.
The issue centres on Coforge’s Board Evaluation Exercise, an important corporate governance process through which companies assess the performance and effectiveness of their boards, committees and directors.
As part of its Q2 FY26 internal audit plan, Coforge’s internal auditor reviewed how the board evaluation exercise was conducted and how the resulting Board Evaluation Report (BER) was prepared and presented to the board. The exercise had been carried out under Bhatt’s guidance.
The audit identified concerns with the process and the disclosure of information connected with the evaluation. According to Coforge, certain material information contained in or relating to the BER, including information concerning the chairman’s performance evaluation, had not been fully disclosed when the report was presented to the board.
The findings prompted the board to seek an explanation from Bhatt.
Bhatt defended his conduct, maintaining that he had acted in good faith and had discharged his responsibilities independently and objectively, keeping the interests of the company in mind.
However, while the board was still examining his response, Bhatt decided to resign.
In his resignation communication, Bhatt said that remaining on the board while there was disagreement over his actions during the evaluation process would not be helpful to the effective functioning of the board. He also made it clear that the matters connected with the internal audit were the reasons for his resignation.
Coforge has said there were no other material reasons behind Bhatt’s departure.
The company has moved quickly to ensure there is no leadership vacuum. Vivek Sharma, who is currently a Non-Executive Independent Director on the board, has been appointed as interim chairperson. He will hold the position until January 31, 2027, unless an earlier change is made.
The development has put corporate governance back in focus at the mid-sized IT services company. While board evaluations are routine exercises, they are closely watched because they are designed to provide an independent assessment of how a company’s leadership and oversight mechanisms are functioning.
The questions raised by the audit also put attention on board accountability, transparency and disclosure practices.
The market reaction reflected that uncertainty. Coforge shares dropped more than 6% during Wednesday’s intraday trading, with the stock falling about 7% at one point. Despite the immediate sell-off, the shares had gained more than 60% over the previous six months, according to Financial Express.
Bhatt’s exit is significant given his background and position at Coforge. Before joining the company’s board, he had a long career in banking and served as chairman of SBI. His departure consequently marks an important change in Coforge’s board leadership.
The company will now have to manage the transition while addressing questions surrounding the board evaluation report. How the board handles the audit findings and strengthens its internal governance processes could become an important issue for shareholders in the months ahead.
At the same time, the available information does not indicate a change in Coforge’s core business operations. The immediate issue is centred on the board evaluation process and the subsequent review of the concerns raised by the internal auditor.
The priority now is to restore confidence around its governance framework while ensuring that the board continues to function smoothly under interim chairperson Vivek Sharma.
The episode serves as a reminder that for listed companies, governance is closely tied to investor confidence. Even when the underlying business remains unaffected, questions around transparency, board oversight and disclosure can quickly influence market sentiment.