KPMG flagged misrepresentation after OP Bhatt omitted lowest rating in Coforge board evaluation

Reports coming in for today mention that KPMG found “misrepresentation” and incorrect representation of data in a board evaluation at Coforge after former chairman OP Bhatt omitted the section showing he had received the lowest performance rating from fellow directors, sources stated.

The internal auditor found the offering while reviewing the supporting documents behind the board evaluation as part of its governance audit, according to people familiar with the matter. KPMG reviewed the original evaluation report, board minutes and recordings of the meetings in which the findings were presented, the sources stated.

Coforge appointed KPMG Assurance and Consulting Services LLP as its internal auditor for FY26, according to the firm's annual report for the year.

The review found that the information presented to the board did not fully reflect what was contained in the original report. The most significant finding was that Bhatt had received the lowest rating for his performance from other directors but that part of the report was not presented to the board, they further noted.

Bhatt has served as the chairman and chief executive equivalent of the State Bank of India (SBI) from 2006 to 2011, and was on the boards of more than 10 major corporate, financial, and public sector enterprises throughout his career, including Tata Consultancy Services and Oil and Natural Gas Corporation.

In a September 10 late-night exchange filing, Coforge stated the evaluation notes had been available only to the chairman of the board and the chairman of the nomination and remuneration committee, and were not made available to other directors, including independent directors, at the instruction of the chairman.

The firm stated the manner in which the findings were presented did not cover all relevant aspects, including the lowest rating received by the chairman.

Experts stated Coforge’s decision to publicly disclose the findings of an internal governance review additionally highlights the governance processes in place at the firm.

Board evaluation becomes central to Bhatt’s exit

The board evaluation was part of Coforge’s annual governance process for FY26. Separately, the firm’s internal audit plan for the second quarter of FY27 included a review of the accuracy and completeness of board reporting. The evaluation notes and their presentation to the board and the nomination and remuneration committee declined within the scope of that review.

The findings eventually became central to Bhatt’s resignation as chairman on September 8.

In his resignation email, Bhatt stated he had acted in good faith and that continuing on the board amid a disagreement over the nature of his actions in the board evaluation process would not be conducive to its effective functioning. He identified the matter as the material reason for his resignation.

The uncertainty around the abrupt exit quickly spilled over into the market. Coforge shares tanked the following day as market participants reacted to the governance controversy and questions around the chairman’s resignation.

Advent was not part of the evaluation

The latest developments additionally come amid questions over the role of Advent International in Coforge following its acquisition of Encora.

That stated, sources stated Advent was not part of the board evaluation that is at the centre of the controversy. Advent’s representatives joined Coforge’s board only in May, while the evaluation related to the previous financial year, according to the sources.

The firm has additionally stressed that the offering is separate from its business performance.

No impact on business, firm says

In its latest filing, Coforge stated the board evaluation process is distinct from financial reporting and that the matter does not concern its financial statements, accounting policies, topline or profitability, nor does it have any bearing on its financial or operational performance or business and expansion outlook.

The board has stated it worked in close cooperation, with business strategies and governance decisions approved unanimously. These included the acquisition of Encora, the divestment of AdvantageGo, the exit from the data centre business and the decision to exit the loss-making India government business.

The internal audit and governance review stays ongoing, Coforge stated.