Coforge Governance Crisis Deepens As NRC Chair DK Singh Resigns After Board Evaluation Row

Coforge Ltd’s boardroom turmoil intensified on Friday after non-executive independent director DK Singh resigned as chairperson of the nomination and remuneration committee (NRC).

His resignation follows the exit of company chairman OP Bhatt earlier this week after an internal audit raised concerns over the handling of a board evaluation report.

Singh, in his resignation letter, said the company’s transition from a private equity-led board structure to a more independent board had resulted in "differences and tensions" between independent and executive directors.

He said, "...Following the unfortunate events of the past several weeks and resignation of the Chairman - Mr. OP Bhatt early this week, I believe this is the appropriate decision for me at this time."

Internal audit flags board evaluation concerns

The internal review found that the board evaluation report, which was available to Bhatt and Singh, was not circulated among other board members. The audit examined how the evaluation findings were shared, presented and discussed before the NRC and the board.

The auditor noted that the presentation of findings by Bhatt and Singh did not include all significant observations.

"In particular, while the chairman's category received the lowest rating in the reports, this finding was not disclosed or discussed before the NRC (nomination and remuneration committee) or the board by the NRC chair and the chairman of the board," the company said in its filing.

Coforge said Singh’s resignation came after the concerns identified in the internal audit and the subsequent process to seek explanations from both the former chairman and NRC chairperson.

Coforge begins board restructuring process

The company said interim chairman Vivek Sharma will oversee the search for additional independent directors and manage the process of appointing a new chairman. Existing as well as newly appointed directors will be considered for the position.

Coforge has also appointed independent director Beth Boucher as the new chairperson of the nomination and remuneration committee.

For the June quarter, Coforge reported a consolidated net profit of ₹5.19 billion on revenue of ₹55.28 billion. The company’s shares closed at ₹1,846.50 on the National Stock Exchange on Friday, rising 0.7% from the previous session.