Flipkart's Binny Bansal steps down over 'personal misconduct' allegations

Bansal, who along with Sachin Bansal co-founded Flipkart, 'strongly denies the allegation', according to Walmart's statement

Flipkart co-founder and Group CEO Binny Bansal has resigned from the e-commerce major over an "allegation of serious personal misconduct",  an official release from Walmart, the firm's new parent company, said on Tuesday.   

"His decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct. He strongly denies the allegation. Nevertheless, we had a responsibility to ensure the investigation was deliberate and thorough," Walmart's statement, available online, said. In May this year, Walmart acquired a 77 per cent stake in Flipkart with an investment of around $16 billion.

      

The statement said that the investigation "did not find evidence to corroborate the complainant's assertions against Binny". However, according to the statement, the investigation "did reveal other lapses in judgement, particularly a lack of transparency, related to how Binny responded to the situation". The statement from the US retail major added: "Because of this, we have accepted his decision to resign."  

As of 2016, Bansal, 37 years old at present, was worth $1.2 billion, according to Forbes. 

Kalyan Krishnamurthy will continue as the CEO of Flipkart, which will now include Myntra and Jabong, Walmart said. Ananth Narayanan will continue as the CEO of Myntra and Jabong and will report to Krishnamurthy.

Bansal’s resignation marks the exit of co-founders from India’s largest online retailer. Sachin Bansal (not related to Binny) had exited the company they founded more than a decade ago after selling his stake to Walmart earlier this year.   

Sameer Nigam would continue leading PhonePe -- Flipkart's payments unit -- as CEO, Walmart said. Both Kalyan and Sameer will report directly to the board, the statement added.     

Walmart's statement said the recent events "risked becoming a distraction for the company" and Binny had made a decision to step down.

The statement pointed out that Binny had been contemplating a transition for some time and that the company (Walmart) had been working together on a succession plan, which has now been accelerated. 

"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 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.