New Delhi: Flipkart co-founder Binny Bansal has resigned as group chief executive officer following an independent probe into allegations of “serious personal misconduct”, the firm’s owner Walmart Inc said Tuesday. Bansal, 37, has strongly denied the allegations, the company said in a statement.
While the company did not provide details of the nature of misconduct or the findings of the probe for which it had engaged a global law firm, sources said the allegations were made in July. The allegations, sources said, do not involve an employee of Flipkart and indicated that the complainant was associated with Flipkart a few years ago and is now running her own venture. This, however, could not be independently ascertained. The matter is in “personal realm,” sources said adding disclosure and transparency during the investigation were found not to be satisfactory, though no conclusive evidence against Bansal could be established.
The investigation, they said, started soon after allegations were made against Bansal, who had co-founded Flipkart with his IIT-Delhi batchmate Sachin Bansal in 2007. Sachin Bansal left the company following its USD 16-billion acquisition by US retail behemoth Walmart in May this year. The probe by the law firm was just concluded, sources said. The company has refused to name the investigating firm. “While the investigation did not find evidence to corroborate the complainant’s assertions against Binny, it did reveal other lapses in judgement, particularly a lack of transparency, related to how Binny responded to the situation. Because of this, we have accepted his decision to resign,” Walmart said in its statement.
On his future association, Binny said he will continue to remain a large shareholder and board member of the now Walmart-owned firm. Walmart said the events surrounding the allegations had “risked becoming a distraction”, prompting Bansal’s decision to step down. He had been appointed group CEO in January last year. In a separate statement, Flipkart said: “This has been an unfortunate and challenging situation for Binny, his family and Flipkart.” Kalyan Krishnamurthy, currently chief executive of the Flipkart division, will report directly to the board, Walmart said. Flipkart said the succession plan has now been accelerated as Bansal had been “contemplating a transition for some time”.
Sachin Bansal, the other co-founder (not related), had left Flipkart after selling his entire 5.5 per cent stake to Walmart as part of the deal. Kalyan Krishnamurthy will continue to be CEO of Flipkart, which will now include Myntra and Jabong, continuing to operate as separate platforms within the Flipkart business, the statement said. Ananth Narayanan will continue as CEO of Myntra and Jabong and will report to Krishnamurthy. Sameer Nigam will continue to head PhonePe — Flipkart’s payments unit — as CEO. Both Krishnamurthy and Nigam will report directly to the board, Walmart said. “We remain committed to investing for the long-term and are supportive of the leadership team’s desire to evolve into a publicly-traded company in the future,” it added.
In an internal email, Krishnamurthy sought to assuage employee concerns stating that “there will be no changes in our operating processes, or to the mission of the company as a result of this news”. “Flipkart will continue to invest heavily in the supply chain, innovation, and technology, with a focus on optimising operations, and empowering employees… For Flipkart to keep succeeding, it is crucial for our teams to thrive, and we will continue to do everything possible to ensure you are given the opportunity to do just that,” he added.
