O P Bhatt resigns from Coforge board over evaluation concerns; stock falls 8.7%

Shares of IT services company Coforge fell as much as 8.7% to ₹1,780.70 in intraday trade on Wednesday after O P Bhatt resigned as the company’s non-executive independent director and chairman with immediate effect, following concerns raised in an internal audit over the board evaluation process.

The stock subsequently recovered a significant portion of its losses. At around 12:36 pm, Coforge was trading at ₹1,856, down 4.82% from its previous close of ₹1,950, after touching an intraday high of ₹1,877.60.

Why did O P Bhatt resign?

According to Coforge’s regulatory filing, its internal auditor, as part of the Q2 FY26 internal audit plan, reviewed the process followed for the board evaluation exercise conducted in March-April 2026 and the resulting board evaluation report, which was presented to the board under Bhatt’s guidance.

The review identified concerns regarding the manner in which the BER was dealt with and presented to the board. This included certain material information contained in or relating to the BER and information concerning the performance of the chairman not being fully disclosed to the board when the report was presented.

Following the findings, the board raised its concerns with Bhatt and sought his explanation. Coforge said Bhatt provided his response and maintained that he had acted in good faith. However, the board was still considering and evaluating his explanation and had not taken any final decision on the matters raised when Bhatt resigned on September 8.

Bhatt says disagreement led to exit

In his resignation email, Bhatt said he had carefully considered the matters raised with him concerning the board evaluation process, his response and the circumstances that followed.

“I have concluded that it is appropriate for me to resign from the Board of Directors of the Company, with immediate effect,” Bhatt said.

He added that he had always sought to discharge his duties “independently, objectively and in the best interests of the Company and all its shareholders.”

Bhatt said continuing on the board amid a disagreement over the “characteristics of my good faith actions in the Board evaluation process” would not be conducive to the effective functioning of the board.

“The matters referred to above are the material reasons for my resignation, and I confirm that there are no other material reasons for my resignation,” he said.

Coforge says financials, business unaffected

Coforge clarified that the matter relates solely to the Board Evaluation Exercise and has no connection with the company’s financial statements, financial reporting or other financial matters. It also said the issue has no bearing on its operations, business performance or near-, medium- and long-term guidance.

Following Bhatt’s resignation, Vivek Sharma, a non-executive independent director, has been designated as interim chairman until January 31, 2027. Bhatt has also ceased to be a member of all board committees with immediate effect.

The resignation comes amid broader weakness in Indian IT stocks, with the Nifty IT index falling around 3% during Wednesday’s session.