Coforge Raises Governance Concerns Over OP Bhatt’s Handling Of Board Evaluation Report

Coforge has flagged governance concerns involving its outgoing chairman OP Bhatt, alleging that he did not provide the board and the nomination and remuneration committee (NRC) with the complete findings of an internal audit report on the board evaluation process.

According to a report by Business Standard, the company said the audit observations related to how the evaluation report and its findings were circulated, presented and discussed before the NRC and the board.

Bhatt, a former State Bank of India chairman, was also a member of the NRC, while the committee was headed by independent director DK Singh.

Audit raises concerns over report disclosure

According to Coforge, the evaluation reports were available only with Singh and Bhatt and were not shared with other board members, including independent directors, based on Bhatt’s instructions.

“The internal auditor has further observed that the manner in which the evaluation findings were presented (without sharing copies of the reports), by the chairman of the board and the NRC chair, to the NRC and the board, did not cover all relevant aspects and findings. 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,” the company said in a filing with the BSE.

Bhatt was not immediately available for comment. Earlier, he had said he had performed his responsibilities independently, objectively and in the company’s best interests.

Governance issue impacts chairman reappointment

The internal audit was part of Coforge’s second-quarter audit plan and examined the board evaluation exercise conducted under Bhatt’s guidance.

The review identified concerns over the handling of the report and alleged that certain material information related to the evaluation and chairman’s performance was not fully disclosed.

The findings may have influenced Advent International, Coforge’s largest shareholder, to vote against Bhatt’s reappointment as an independent director and chairman for another five-year term until 2032.

Bhatt, who turned 75 earlier this year, became an independent director in May 2024 and was appointed chairman in June 2024. His current term was scheduled to end in April 2027.

Advent International holds around 20% stake in Coforge after the IT services company acquired Encora for approximately $2.35 billion last year.