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Business News›News›Company›Corporate Trends›Coforge says chairman OP Bhatt instructed to hide audit findings from other board members

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Coforge says chairman OP Bhatt instructed to hide audit findings from other board members
Synopsis

Coforge chairman OP Bhatt resigned two days after board evaluation findings were withheld. The internal audit revealed these crucial reports were not shared with other directors. Key investors confronted Bhatt with the review's findings concerning his performance. Bhatt's reappointment as an independent director failed to secure sufficient shareholder support. The company stated the board evaluation process is separate from financial reporting.

ETMarkets.com

Two days after the chairman OP Bhatt's resignation, Coforge says the board evaluation report findings, including the chairman's lowest rating, were not made available to other board members at the instructions of chairman, as per the latest disclosure by the company late Thursday.



"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," Coforge said in the filing.



Also read: KPMG audit revealed OP Bhatt suppressed key information as Coforge board chair

ET reported that in early August an internal audit by KPMG red-flagged lapses by chairman Bhatt's failure to reveal full findings of an April board evaluation being kept from other directors.



And key Coforge investors confronted Bhatt with the findings of the review that covered a period of 12 months preceding the start of the audit.




"The relevant Reports were available to the NRC Chair and the Chairman of the Board alone but were not made available to other members of the Board, including the independent directors, at the instruction of the Chairman of the Board," the filing added.

Independent director DK Singh is the Nomination & Remuneration Committee (NRC) chairman.

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.



Coforge added that the internal audit/governance review remains ongoing.



The issue first came to light on Wednesday when Coforge informed the chairman's resignation on September 8.



The Gurugram headquartered firm reassured in the filing that the Board evaluation process is entirely distinct from the company's financial reporting and audit processes.



The annual board evaluation process is mandatory as per the Companies Act of 2013 and the Sebi listing regulations of 2015. Coforge’s board conducted these under the supervision of Bhatt and DK Singh, who is nomination and remuneration committee chairman.



Bhatt, who’d been chair since May 2024, resigned on September 8. His term was to have ended in May 2027 and was scheduled for reappointment.



At the 34th annual general meeting (AGM) on August 24, the special resolution on Bhatt’s reappointment to a five-year term as an independent director from May 2027 failed to gain the requisite 75% support. As per stock exchange disclosures, 65.46% shareholders voted in favour while 34.54% voted against. Despite this, Bhatt continued to remain on the board.

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