Flipkart co-founder quits over personal misconduct allegations
Flipkart co-founder Binny Bansal has resigned as the group chief executive officer following an independent probe into allegations of "serious personal misconduct", the firm's owner Walmart Inc said Tuesday.
Binny, 37, has strongly denied the charges and said he was "stunned" by the allegations. Binny added that he will continue to remain a large shareholder and Board member of the company that he had co-founded 11 years ago.
Walmart, in its statement, said Binny's decision to step down followed an independent investigation done on behalf of Flipkart and Walmart, even though the probe "did not find evidence to corroborate the complainant's assertions" against him.
The company, however, did not provide details of the nature of misconduct or the findings of the probe for which it had engaged a global law firm.
According to sources, the probe -- that began in July -- did not involve an employee of Flipkart. They indicated that the complainant was associated with Flipkart a few years ago and is now running her own venture. The matter is in "personal realm," they added.
This, however, could not be independently ascertained.
"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.
It added that 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 an email to employees, Binny said he had been mulling over the right time to step away from an operating role at Flipkart Group for some time.
"My plan was to continue in my current role for a few more quarters to continue the transition after closing the deal with Walmart. However, my decision to step down has been accelerated by certain personal events that have taken place in the recent past," he wrote in his email.
He, however, added that he will continue to remain a large shareholder and board member of the now Walmart-owned firm.
Binny had co-founded Flipkart with his IIT-Delhi batchmate Sachin Bansal in 2007. Sachin Bansal (not related) left the company, selling his entire 5.5 per cent stake to Walmart, as part of the mega USD 16-billion deal with the US retail behemoth in May.
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 adding that Flipkart will now include fashion portals, Myntra and Jabong even though they would continue to operate as separate platforms.
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.