Coforge chairman OP Bhatt resigns after audit reveals he hid his own poor rating

What happened at Coforge?

Former State Bank of India chief OP Bhatt has resigned as chairman of IT services firm Coforge after an internal audit by KPMG revealed he had suppressed his own poor performance scores and misled fellow directors.

The governance dispute, which came to light in recent regulatory disclosures, centred on Coforge's mandatory annual board evaluation. Under Indian corporate law and securities regulations, listed companies must run these reviews to grade individual directors and the board as a collective. But when the results came in earlier this year, only Bhatt and DK Singh, the head of the nomination and remuneration committee, had access to the full reports.

How the audit exposed the cover-up

The tension began building in August, just as the audit got under way following Coforge’s first-quarter earnings. The review, which covered the previous 12 months, quickly zeroed in on two distinct exercises: the Board Member Evaluation Report, which grades individual directors, and the Board Evaluation Report, which assesses the board as a collective.

KPMG was brought in by the company’s audit chair and chief financial officer to conduct a wider governance review. When the auditors cross-referenced the original evaluation documents with what had actually been presented to the board, they found significant discrepancies.

When Bhatt and Singh summarised the evaluation findings for the rest of the board in June, they left out critical sections. Most notably, they omitted the specific criteria where Bhatt had scored the lowest of any director on the board.

The auditors also found that Bhatt misled the board by pointing to "corporate culture" as the source of poor scores, rather than his own leadership. Furthermore, Singh had presented individual review data under the guise of the collective board evaluation, leaving other directors in the dark about which report was which.

Under rules set by the Securities and Exchange Board of India (SEBI), independent directors must review the chairman's performance, and the entire board must vet the reviews of individual directors. KPMG’s audit concluded that the Coforge board was kept blind to half of the eight evaluation criteria. By keeping these details under wraps, the audit firm said, the board was led to recommend Bhatt’s continuation without knowing the full facts—a material breach of governance standards.

The fallout and resignation

Once KPMG's findings were flagged to Coforge's major investors—including private equity firms Advent International and Warburg Pincus—the tide turned against the chairman. Bhatt's bid for a five-year term extension from May 2027 had already hit a wall at the annual general meeting on 24 August, where it failed to secure the necessary 75 per cent shareholder approval, drawing only 65.46 per cent in favour.

Late last month, Bhatt was given 48 hours to explain the discrepancies in writing to the other directors. He resigned within a week, on 8 September.

In his resignation letter, Bhatt defended his actions, writing that he had acted in "good faith" but that continuing on the board amid "disagreement" would not be conducive to its work.

Coforge, an AI-native firm valued at around Rs 81,630 crore, saw its shares tumble 7 per cent following the disclosures. The company has appointed Vivek Sharma as its interim chairperson while it seeks to move past the governance row. Brokerages have sought to reassure investors, stating the executive shakeup will have no lasting impact on the firm's day-to-day operations or financial health.