"Bansal's decision to quit came after an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct," the city-based e-commerce company and its parent American retail giant Walmart said in a joint statement here.
Bansal, however, denied the allegation, the statement said.
"He (Bansal) denies the allegation. Nevertheless, we (Flipkart and Walmart) had a responsibility to ensure the investigation was deliberate and thorough," the companies said.
The investigation revealed lapses in Bansal's judgement, the statement added.
"While the investigation did not find evidence to corroborate the complainant's assertions against Binny, it did reveal other lapses in the judgement, particularly lack of transparency related to how Binny responded to the situation. Because of this, we have accepted his decision to resign," the statement said.
"Binny has been an important part of Flipkart since co-founding the company, but recent events risked becoming a distraction and Binny has made a decision to step down," added the statement.
In an e-mail to the company's staff, Bansal denied the allegations and claimed they left him "stunned".
"The allegations left me stunned and I deny them. The investigation, however, did bring to light lapses in judgment, particularly lack of transparency," he admitted.
He also said he had been considering stepping away from the executive post for a while, but wanted to continue for a few more months to continue through the transition after Walmart bought a majority stake in Flipkart in May.
"These have been challenging times for my family and me. I am concerned that this (allegation) may become a distraction for the company and the team. In light of these circumstances, I feel it is best to step away as Chairman and CEO," Bansal wrote.
He, however, will continue as a shareholder in the company and as a member of the Board of Directors, Bansal added.
With Bansal quitting the executive post, the group said it had accelerated the succession plan.
Going forward, Kalyan Krishnamurthy will continue to be the CEO of e-tailer Flipkart, which will include online fashion portals Myntra and Jabong, though they would operate separately.
Though Binny and Sachin Bansal co-founded Flipkart in 2007, the latter left the company in May when Walmart bought a 77 per cent equity stake in the company for a whopping $16 billion (Rs 1,16,256 crore).
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)