Chairman OP Bhatt hid audit findings from board members, says Coforge

The IT services firm said reports were available only to OP Bhatt and NRC chair DK Singh, while the chairman's lowest rating was not disclosed or discussed with the full board

Global digital services and solutions provider Coforge has said O P Bhatt did not share the complete findings of the board evaluation report prepared by the internal auditor KPMG with the board and the nomination and remuneration committee (NRC). This further complicates matters between the outgoing chairman and the company, raising serious governance issues in one of India’s fastest growing mid-tier information technology (IT) services firms. 

Earlier this week on Tuesday, Bhatt resigned following concerns raised by the auditor relating to the manner in which the board evaluation report (BER) was dealt with and presented before the committee and the board by the NRC head and the chairman. Bhatt, a former chairman of State Bank of India (SBI), was also a member of the NRC, while the committee was being headed by non-executive independent director DK Singh. 

 

Coforge said the reports were available only to Singh and Bhatt, but not to the other board members, including the independent directors. This was at the instruction of Bhatt.  

“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 and the NRC chair, to the NRC and the board, did not cover all relevant aspects and findings. 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,” the company said in a late night filing with the BSE on Thursday. 

Bhatt could not be immediately reached for a comment on the matter. However, earlier this week, he said that he always discharged his duties independently, objectively and in the best interests of the company.  

The audit was part of the company’s second quarter audit plan and examined the board evaluation exercise conducted under Bhatt’s guidance, as well as the report subsequently presented to directors. It found concerns over how the report was handled, including the failure to fully disclose certain material information relating to the evaluation and the chairman’s performance.  

                                     Now, D K Singh resigns citing tensions  

In another major boardroom fallout at Coforge, its non-executive independent director and Nomination and Remuneration Committee Chairperson D K Singh resigned, alleging “differences and tension” between independent and executive directors. The firm, however, refuted Singh’s claims as “unfounded” and an “afterthought”, saying his resignation followed an internal audit review that flagged governance lapses in how he and former chairman O P Bhatt handled a board evaluation exercise. The development comes just days after Bhatt abruptly stepped down. PTI