Shares of Indian IT services firm Coforge Ltd. experienced a significant drop, falling approximately 7% in early trading following the resignation of its Chairman, Om Prakash Bhatt. The company quickly moved to reassure investors, stating that Bhatt's departure was connected to a board evaluation exercise and not to its financial health or reporting.
In a regulatory filing, Coforge clarified that the issues prompting the resignation stemmed from a board evaluation conducted in March and April 2026. The company emphasized that these matters "solely relate to the Board Evaluation Exercise which is a regulatory requirement" and bear no connection to its financial statements, performance, or operational guidance, which remains unchanged for the near-term and long-term.
Details Behind the Chairman's Resignation
Om Prakash Bhatt's resignation letter indicated a disagreement regarding the characteristics of his "good faith actions in the board evaluation process," stating that his continued presence would not be conducive to effective board functioning. An internal audit review had reportedly identified concerns regarding how the Board Evaluation Report (BER) was handled and presented, including certain material information about the BER and the Chairman's performance that had not been fully disclosed to the board.
Coforge acknowledged that the board considered it crucial to clarify that the resignation followed these identified concerns and the subsequent process undertaken to seek and consider Bhatt's explanation. The company expressed gratitude for Bhatt's services, noting his immediate cessation from all committee memberships.
Company Reassures Investors Amidst Stock Reaction
Despite the initial market reaction, with shares opening down 6.57% at Rs 1,821 apiece before recovering slightly to trade down 5.76% at Rs 1,836.90, Coforge reiterated its stability. The company stated that "the board and the management team continues to support the Company in its business and operations as usual, and the Company remains focused on executing its business and growth plans."
In the interim, Vivek Sharma, a Non-Executive Independent Director, has been appointed as the Chairperson until January 31, 2027, ensuring continuity in leadership during this transition period.