Shares of IT services firm Coforge tumbled nearly 6 per cent on the Bombay Stock Exchange on Tuesday after its chairman and independent director OP Bhatt resigned from the board with immediate effect. The departure comes on the heels of an internal audit review that raised serious questions about how the company conducted its recent board evaluation exercise.
According to sources familiar with the matter, the internal audit probed into procedural irregularities surrounding the board evaluation process — a mechanism through which the performance and functioning of the board of directors are assessed annually. While specific details of the findings have not been made public, the audit reportedly uncovered gaps in how the evaluation was structured and documented, prompting Bhatt's decision to step down.
Bhatt, who served as both chairman and an independent director on the board, announced his resignation on Tuesday morning. The company stated that his exit was effective immediately and that no further reasons were attached to the resignation letter. In a brief statement, Coforge confirmed the departure but did not elaborate on the circumstances surrounding the internal audit findings.
Market reaction was swift. Coforge's shares, which had been trading in positive territory earlier in the day, gave up gains and eventually settled around 6 per cent lower. Trading volumes surged well above their usual levels, indicating significant selling pressure from institutional and retail investors alike. The company's market capitalisation took a noticeable hit, shedding several hundred crore rupees in valuation.
Corporate governance experts say the episode highlights the increasing scrutiny around board-level processes in Indian companies, especially those listed on major exchanges. The Securities and Exchange Board of India (Sebi) has, in recent years, tightened norms around board evaluations and disclosure requirements, making such lapses potentially consequential for both directors and shareholders.
Investors now await clarity on whether the board will appoint a new chairman and whether additional leadership changes may follow. The company's next board meeting and any ensuing disclosures will be closely watched by market regulators and analysts.
