Corporate governance in India’s mid-tier technology sector faced a rare and high-profile reckoning this week following the abrupt resignation of Coforge Chairman Om Prakash Bhatt. What initially appeared to be a routine leadership departure has unraveled into a governance crisis, triggered by an internal KPMG audit that revealed systematic failures in board evaluation transparency.
The Hidden Reports and Missing Scores
The seeds of the crisis were planted during annual board evaluation exercises conducted under the supervision of Bhatt and Nomination and Remuneration Committee (NRC) chairman DK Singh. According to internal documents reviewed by investigators and regulatory disclosures, KPMG was brought in to conduct a comprehensive governance review following first-quarter results.
The audit uncovered a fundamental breach of transparency: two distinct reports—the Board Member Evaluation Report (BMER), which assesses individual directors, and the Board Evaluation Report (BER), which evaluates collective board performance—were restricted exclusively to Bhatt and Singh.
When summaries were verbally presented to the NRC and the wider board, physical or digital copies were withheld. Crucially, the presentations omitted vital performance metrics, including the fact that Bhatt’s own individual performance review received the lowest score among all board members. Furthermore, audit findings indicated that the board was misinformed regarding low-scoring criteria, and critical regulatory evaluations mandated by the Securities and Exchange Board of India (SEBI) were bypassed.
The Shareholder Backlash and AGM Defeat
The governance discrepancies put Bhatt on a collision course with institutional investors. At Coforge’s 34th Annual General Meeting, a special resolution proposing a five-year reappointment for Bhatt failed to clear the required 75% majority threshold, capturing only 65.46% of shareholder support amidst heavy pushback from public and institutional funds.
With key private equity backers like Advent International and Warburg Pincus—alongside mutual fund giants such as HDFC, SBI, and Motilal Oswal—facing mounting questions over transparency, the release of the KPMG audit report in early September proved decisive. Faced with a formal 48-hour window to respond to the board regarding the findings, Bhatt submitted his resignation.
In his exit communication, Bhatt noted that continuing on the board amidst disagreements over his actions in the evaluation process would not serve the company’s effective functioning.
Reassuring the Market
Following Bhatt’s departure, the board moved swiftly to stabilize leadership, naming Vivek Sharma as interim chairperson. Coforge management and regulatory filings have explicitly clarified that the KPMG audit observations pertain strictly to board-level evaluation processes and compliance disclosures, asserting that they have no impact on the company’s financial statements, accounting integrity, or operational execution.
While Coforge’s stock experienced a temporary pullback following the disclosure, the swift regulatory compliance and decisive shareholder pushback signal a maturing corporate governance ecosystem in India, where even veteran banking and corporate icons are held to strict accountability standards.
