The chief executive of Flipkart Group, Walmart Indian e-commerce Company, resigned following an internal probe to accusations of”serious personal misconduct,” Walmart Stated Tuesday.
The passing of Binny Bansal, 37, one of the co-founders of Bangalore-based Flipkart, could be a drawback for Walmart’s attempts to compete with Amazon at India’s enormous consumer market. A tech-savvy billionaire, Bansal took over as CEO of Flipkart in 2016. He became the chairman and group CEO of this e-commerce business this year.
The investment is the U.S. retailer’s biggest acquisition and was a significant move in its efforts to compete against Amazon’s rising market share at home and overseas.
Walmart announced it would acquire the stake in Flipkart in May and completed the deal in August. In a note delivered to Flipkart workers, which was seen by Reuters, Bansal said recent events directed him to resign from his role as chairman and CEO. He said the events related to a claim of misconduct against him”which was uncorroborated following a comprehensive investigation performed by an independent law firm”
Bansal didn’t provide details of the nature of this claim.
“The analysis, however, did bring to light lapses in judgment, especially a lack of transparency, associated with how I responded to the circumstance,” he said, without elaborating further.
Neither Bansal nor his agents responded to requests for comment. Flipkart didn’t respond to requests for comment.
A individual in the USA familiar with the Walmart analysis said”a claim of sexual attack against Binny” came to its attention in late July. The accusation obsolete to a few years before and was made by a former Flipkart associate, who was not with Flipkart at the moment, the person added.
Walmart stated in a filing which it conducted its own investigation into the allegations, without saying exactly what the accusations were.
“While the analysis did not find evidence to corroborate the complainant’s assertions contrary to Binny, it did show other lapses in judgment, particularly a lack of transparency, related to how Binny reacted to the circumstance.” Walmart explained. “Because of this, we have accepted his decision to resign.” The individual familiar with the matter at Walmart explained that Bansal had hired two private security firms at the end of 2016,”to make this thing go away,” referring to the alleged assault claim. The person didn’t disclose the names of their security company or the parties involved and Reuters was not able to affirm them.
“Binny had an chance to disclose such allegations to us when we were in talks (to put money into Flipkart). .but he didn’t,” the person said.
Hailing from the northern Indian city of Chandigarh, Bansal is one of India’s best-known entrepreneurs following starting Flipkart in 2007 with Sachin Bansal. The duo, who hail from the same town but who are not connected, formed Flipkart soon after stopping Amazon.
Originally an online bookstore run out of a two-bedroom apartment in India’s technology hub of Bengaluru, Flipkart climbed over the next decade to become India’s most valuable technology startup. Its units include Flipkart, which sells general merchandise, the accessories and clothing retailer Myntra, the fashion portal Jabong and PhonePe obligations app. Walmart has stated it may create an initial public offering of Flipkart openly within the next four decades.
Another source directly briefed on the matter in India, who did not want to be named, said Bansal remains a shareholder in Flipkart and has not expressed any desire to sell his stake.
Walmart said Bansal had been considering a transition for a while and that the companies were working together on a succession plan, which had now been hastened. In his note to Flipkart workers, Binny Bansal said that he had believed he might continue as CEO to get”a few more quarters.”
Kalyan Krishnamurthy, who directs the company’s main Flipkart e-commerce performance, would now act as chief executive to get a broader group of businesses including apparel sites Myntra and Jabong, Walmart Stated
Ananth Narayanan, who is the CEO of Myntra and Jabong, will continue in these jobs and will now report to Krishnamurthy.
The social media #MeToo movement against sexual harassment that started in the United States over a year past has gained traction in India in recent weeks.
Walmart’s shares traded down 1.15 percent at $102.68 (approximately Rs. 7,400) per share in afternoon trade.