Three days after the sudden exit of chairman O P Bhatt, Coforge Ltd lost a second board member in on Friday, with non-executive independent director and Nomination and Remuneration Committee (NRC) chair D K Singh resigning with immediate effect. The company, however, disputed the reasons given by Singh for his resignation.
In a filing to the stock exchanges after market hours on Friday, the IT services company said Singh had communicated his resignation by email on September 10. He ceased to be a member of all board committees with immediate effect.
Chairman O P Bhatt resigned on September 8 following observations by the company's internal auditor on the handling of the Board Evaluation Report (BER). Coforge shares fell about 9% on September 9 after the company disclosed Bhatt's resignation. On Friday, the company shares regained some of the losses and ended the day at 1.15% higher.
In his resignation letter, DK Singh said the transition from a private equity-led board to a more independent board after he joined in 2024 had created differences and tension, particularly between independent and executive directors.
He also said the appointment of new board members could again change the board's direction and priorities on strategy, transparency and compensation. This, he said, could make it increasingly difficult for him to exercise independent judgment. Singh said there were no other material reasons for his resignation.
The board strongly disputed this account. It said directors, including independent directors, were surprised by the allegation of tension and described it as unfounded and an afterthought.
According to the board, all business strategy and governance decisions since 2024 had been approved unanimously, with board meeting minutes reflecting the same.
The board also linked Singh's resignation to the internal audit review. It said the audit had raised concerns about the board evaluation process and that the board subsequently sought explanations from only two directors — the board chairman and the NRC chair.
"It is apparent," the board said, that Singh's resignation followed these events.
Coforge also pointed out that Singh had accepted a five-year second term beginning February 2026, before the internal audit observations were raised. Bhatt had similarly agreed to a five-year second term in July 2026.
According to the audit, the evaluation reports were available only to the NRC chair and the board chairman. Unlike in the past, the reports were not shared with other directors, including independent directors.
The auditor also found that the way the findings were presented, without circulating copies of the report, did not cover all relevant aspects.
In particular, the chairman's performance category received the lowest rating in the evaluation reports. However, this was neither disclosed nor discussed before the NRC or the board by the NRC chair and the board chairman.
Coforge has previously said the issue relates only to the regulatory board evaluation process and has no impact on its financial statements, financial reporting, operations or guidance.
Following Singh's resignation, the board reconstituted the NRC and the Stakeholders' Relationship Committee. Non-executive independent director Beth Boucher has been appointed NRC chair.
Vivek Sharma will continue as interim chair until January 31, 2027. He will oversee the search for additional independent directors and the election of a new chair. The company said the process would consider both existing and newly appointed directors.
