The boardroom ruckus at Coforge Ltd—which caught media attention following the resignation of its chairman, OP Bhatt, a few days ago—gained fresh momentum with the resignation of the NRC chairman, DK Singh. The reasons cited by the resigning directors stand in stark contrast to the official narratives emanating from the company.
This case presents an engaging study in corporate power play. Unlike most Indian listed entities, Coforge has no designated promoter group and is governed by an ostensibly independent board. But peeling back a few facts may reveal another picture.
Mr Bhatt was initially appointed as an independent director (ID) for a three-year tenure effective 1 May 2024 and was designated chairman of the board on 29 June 2024. His original term is valid through 30 April 2027.
The resolution approving his initial appointment—which included enabling provisions to serve past the age of 75—was overwhelmingly passed via postal ballot by both ‘public-institutions’ and ‘public-others’.
Intriguingly, despite nine months remaining in his present term, a special resolution for his re-appointment—this time for five years (1 May 2027 to 30 April 2032) appears to be a last-minute inclusion in the AGM notice dated 27 July 2026.
The NRC meeting approving this second term took place on the very same day, potentially indicating a push from somewhere for a subject that demanded no regulatory or operational urgency.
The special resolution failed, securing only 65.47% of votes cast against the required 75% threshold. A closer look at the voting pattern revealed an unprecedented pattern:
The extent of participation of ‘public-others’ is shocking, so to say – never does this category poll more than in single digits!
And an almost total rejection of the resolution – a staggering aberration from historical pattern. Only a look at the shareholding details of the company betrayed the devil in the details!
‘Public – Others’ category was dominated by two foreign corporate entities: Ai Altius Parent (Cayman) Limited (holding 5,68,99,895 shares) and Encora Holdco Limited (holding 3,68,96,613 shares).
Together, they hold 21.18% of the company’s total equity and accounted for 9.37 crore out of the 9.91 crore votes cast in this category. Their block vote effectively defeated Mr Bhatt’s re-election.
Under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (SEBI LODR) regulations, the resolution to appoint an independent director can be considered 'passed' if it secures more than 51% of the total votes and more than 51% in the public category, even if the 75% requirement is not met. In this instance, both conditions were met. Yet, the company declared the resolution as 'not passed.'
The two foreign entities enjoy board nomination rights under a share subscription and purchase agreement. However, whether these rights received the approval of the shareholders to become enforceable would need to be verified.
In pursuance of the SSPA, on 23 April 2026, two nominee directors were inducted. Together with a new ID appointed on 1 April 2026, the board dynamic stood altered significantly from April 2026. The internal audit that is quoted as the basis for uncovering details suppressed from the board took place after this board change
Intriguingly, the postal ballot notice approving these April appointments was dated 23 April 2026 but was dispatched to the shareholders only on 29 May 2026—an unusually long lag. Did these appointments encounter internal resistance?
More importantly: Was Mr Bhatt’s premature re-appointment pushed forward deliberately, knowing full well it would face rejection from the newly aligned shareholder block?
And, did his continuing on the board (entirely, validly) post this vote against him trigger the later events?
Public clarifications issued by the company on 10th and 11th September allege that Mr Bhatt and Mr Singh withheld crucial board evaluation data for FY25-26—specifically the low performance rating assigned to the chairman.
This narrative appears to present several logical gaps:
1. Meeting Frequency: The FY25-26 director’s report states that independent directors met five separate times during the year to discuss board and chairman performance—far exceeding the mandatory annual meeting norm.
2. Information Asymmetry: If peer directors had evaluated the chairman poorly during FY25-26, it is intriguing that such feedback was hidden from the very board that generated it until the auditor flagged it. The board evaluation must have been discussed only among the seven directors who were in office before the recent resignations. Even assuming two among those had rated the chairman low, it is strange this point did not come to the surface. In fact, this would have been the first issue to discuss.
3. Annual Report Disclosures: The FY25-26 director’s report contains a detailed, complimentary paragraph on the board evaluation process. If fundamental questions existed regarding the chairman’s performance, allowing these disclosures into the published report raises serious oversight questions.
The company has put out a detailed explanation on 11 September 2026, after announcing the resignation of Mr Singh. The board meeting that dealt with all these intricate controversies reportedly commenced at 5.45pm and ended at 5.51pm. Even the bearer would have taken longer to know who preferred coffee or tea to be served!
While there is no basis to judge which side of the story departs more from the truth, there is every reason to ask if this is a genuine corporate governance clean-up, or an orchestrated power struggle between board factions seeking control of a promoter-less company?
Are these details telling a story that media reports have seemingly overlooked? The jury is still out.
A side note is that the remuneration for the chairman and IDs appears skewed in comparison to peer firms. Whether this triggered the board fissure post the nominees entering the scene is not an impertinent doubt to raise!
(Ranganathan V is a CA and CS. He has over 45 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as a senior advisor post-retirement, handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
