Coforge shares plunged after Chairman Om Prakash Bhatt resigned following an internal audit that flagged concerns over the company’s board evaluation process
Shares of Indian IT services company Coforge fell sharply on Wednesday after chairman Om Prakash Bhatt resigned following concerns raised by an internal audit into the company’s board evaluation process.
Coforge shares fell as much as 8.7 per cent to Rs 1,780.70 on the NSE, their biggest intraday decline in more than a year. The stock was among the biggest losers on the Nifty IT index, which was down nearly 3 per cent in morning trade.
Bhatt, a former chairman of State Bank of India, had been appointed chairman of Coforge’s board in 2024. His term was due to run until April 2027.
What did the audit find?
Coforge said its internal auditor, as part of its Q2 FY26 audit plan, reviewed the process followed for the board evaluation exercise and the resulting Board Evaluation Report.
The review identified concerns over how the evaluation process and report had been handled and presented to the board. It also found that certain material information related to the report, including information concerning the chairman’s performance, had not been fully disclosed to the board when the report was presented.
More from BusinessThe company did not provide details of the information that had not been disclosed.
Following the audit findings, the board raised its concerns with Bhatt and sought an explanation. Bhatt provided his response, and the board was still evaluating it when he submitted his resignation on September 8. The board had not taken a final decision on the matters raised with him, Coforge said.
Bhatt says he acted in good faith
In his resignation letter, Bhatt said he had acted in good faith during the board evaluation process.
He said continuing on the board while there was a disagreement over the nature of his actions would not be conducive to the effective functioning of the board.
Coforge said his resignation followed the concerns identified in the internal audit and the subsequent process through which the board sought and considered his explanation.
Vivek Sharma named interim chairman
Coforge has appointed Vivek Sharma, a non-executive independent director, as interim chairman. He will hold the position until January 31, 2027.
The resignation comes at a time when Coforge remains one of the closely watched mid-sized Indian IT services companies. The sharp reaction in its shares reflects investor concerns over the sudden change at the top of the board and the governance issues highlighted by the internal review.
Coforge’s shares were down more than 6 per cent at around Rs 1,829 in early trading after the initial fall.
(With inputs from agencies.)
