In just 43 days, O.P. Bhatt went from being backed for another five years as Coforge Ltd chairman to abruptly resigning. In between, the firm’s largest shareholder opposed his continuation; an internal audit flagged gaps in Bhatt's sharing of a board evaluation report in which he was rated lowest; and fellow directors sought answers from the veteran banker.
State Bank of India’s former chairman, Bhatt served as an independent director on close to a dozen listed companies in the last 15 years, since he retired from the country’s largest bank in 2011.
The 8 September resignation ended Bhatt's 27-month stint at Coforge and triggered a flurry of disclosures, as the company detailed what happened behind the boardroom doors.
According to three executives in the know and the five regulatory filings made by Coforge within two days, two key events played out.
Firstly, private equity giant Advent International, the largest shareholder owning 21.18% of Coforge, had reservations over Bhatt continuing as chairman until 2032 owing to his age as he would have turned 82, said an executive of the IT (information technology) services firm.
And finally, when the internal auditor raised questions with the nine-member board of Coforge on the board evaluation exercise, it sought Bhatt’s responses. The veteran banker responded, but also decided to quit, a surprise for the company, the executive added.
“Advent may have had reservations about his continuation until 2032, especially in the age of AI (artificial intelligence). But his resignation was a surprise,” said the executive cited above.
The action leading to Bhatt’s resignation on 8 September started on 27 July, when the four-member nomination and remuneration committee (NRC) approved Bhatt's continuation as chairman from 1 May 2027 to 30 April 2032.
The NRC, headed by independent director D.K. Singh, included Bhatt, independent director Mary Beth Boucher and Advent’s managing partner and nominee, Shweta Jalan.
Advent came aboard only this fiscal year. Jalan and director Atin Jain joined the Coforge board on 23 April, after Coforge closed Indian IT’s largest acquisition. A third executive, Vivek Sharma, a senior advisor to Advent, joined in April. Sharma has now been made the interim chairman until 31 January 2027.
Last December, Coforge, which has no promoter, had announced the acquisition of Encora, a US-based data analytics and digital engineering firm, for $2.39 billion. As part of the deal, Coforge gave shares to Encora’s majority owner, Advent, which eventually took a 21% stake in the Noida-based IT services firm.
At the board meeting in July, the NRC unanimously agreed to grant Bhatt a second term, according to a third executive.
Then, it was business as usual for a week.
Sometime in the first week of August, internal auditor KPMG found internal irregularities in Coforge’s board evaluation exercise for the year ended March 2026, according to a second executive.
An external advisory firm had evaluated Coforge’s board for fiscal year 2026 (FY26), a standard practice for listed companies. This firm had submitted the report to Bhatt and independent director Singh.
KPMG sought a video recording of the board meeting during which the board evaluation exercise was held and found gaps between the board evaluation and Bhatt’s submissions at the meeting, according to the second executive cited above.
The three Advent nominees were not included in the evaluation, as they had joined the board only in April and had not participated in the FY26 exercise.
Mint could not independently ascertain what prompted KPMG to conduct this exercise, especially because Coforge’s annual report for FY26 clearly stated the board evaluation exercise was carried out under the rules governing listed companies.
KPMG shared its preliminary findings with the board on 21 August that said Bhatt had received the lowest rating among all board members, according to the second executive.
In its 10 September filing—the firm's fifth disclosure to the exchanges since announcing Bhatt’s resignation on the previous day—Coforge disclosed that Bhatt and Singh had not shared the external firm's report.
“In particular, while the chairman’s category received the lowest rating in the reports, this finding was not disclosed or discussed before the NRC or the board by the NRC chair and the chairman of the board,” Coforge said.
The key point here is that KPMG’s observation made to the board, sometime on 21 or 22 August, was “a preliminary finding”, and Coforge’s board had not yet sought Bhatt’s response, according to the second executive.
Still, Advent, with its three nominees on the board, decided to exercise its voting power and rejected Bhatt’s term extension.
Bhatt’s candidature got 65% support from investors, as against the 75% mandate for a special resolution, as shareholder approval was required to allow him to continue after turning 75.
Sometime between 25 August and 7 September, the board sought an explanation from Bhatt, whose current term was to end on 30 April, said the second executive.
And then, around 3am on 8 September, the board received the chairman's resignation, according to the third executive privy to the development.
In his resignation email, Bhatt attributed his move to the “disagreement considering the characteristics of my good faith actions in the board evaluation process,” adding that his continuing would not have been “conducive to the effective functioning of the board.”
Through that day, Coforge made multiple efforts to reach out to Bhatt. But the veteran banker, probably hurt by the sequence of events, had gone “incommunicado”, said the second executive.
“The board did not ask for his resignation. Based on the internal auditor's observations, it asked Mr Bhatt for an explanation and Mr Bhatt had those questions. Still, he chose to resign on account of those disagreements,” said the second person quoted earlier.
Emails sent to Advent on 10 September went unanswered until press time, whereas KPMG declined to comment on company specific issues. Bhatt could not be reached by phone or text message.
The company was required to inform the exchanges within 24 hours of the resignation. With no response from Bhatt, at 19 minutes past 1pm on Wednesday, Coforge informed the exchanges about him stepping down with immediate effect.
Sharmila Gopinath, an independent governance expert believes Bhatt should have been given more time. “From a governance perspective, it would’ve been right to wait for the whole audit to be completed, and Bhatt must’ve been given time to respond before he was voted out," she said. "However, under no circumstances should he have been given a second term if the findings of irregularities are indeed true.”
“This is why all directors should have ongoing mandatory directors’ training on their fiduciary duties so instances like this can be avoided,” Gopinath said.
Shareholders have taken note of the goings on for now, as the company’s shares fell to a three-week low on Thursday, but closed 0.24% higher on Friday at ₹1,847.40.
At least two brokerages retain confidence over the firm's growth prospects. “We see no reason for concern with this development. The non-renewal of Mr Bhatt’s role as board member and chairman, given his age, was not a big surprise. While the lack of disclosures, leading to his resignation, was a surprise, it is not a reflection of the company, the board and its practices,” said Nuvama Institutional Equities analysts Vibhor Singhal and Yukti Khemani, in a 9 September note. Analysts at Motilal Oswal Financial Services echoed the view.
There is more. Just two days after Bhatt, NRC chair Singh resigned, citing transition-related issues and board tensions.
Coforge, in an exchange filing on Friday, said it was surprised by allegations of friction in the company’s board, calling them unfounded and an “after-thought”.