Binny Bansal quits Flipkart amid ‘personal misconduct’ probe
The #MeToo wave has hit all industries alike. 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. “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.
The timing and the manner of the exit of Binny Bansal, co-founder and group CEO, Flipkart leaves a trail of questions. Walmart’s investigation into Bansal that led to his resignation on Tuesday stemmed from an allegation of sexual assault that dates back a few years, a person familiar with the matter told Reuters.
Bansal has strongly denied the allegations, the details of which were not disclosed.
“For some time, I have been mulling over the right time to step away from an operating role at Flipkart Group. 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 an email to employees.
Bansal added that these events relate to a claim of serious personal misconduct made against him, “which was uncorroborated after a thorough investigation completed by an independent law firm”.
According to sources, the investigation started in July.
“The allegations left me stunned and I strongly deny them. The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation,” he said.
Bansal said these have been “challenging times” for him and his family, and in light of these circumstances, he felt it was best to step away as chairman and Group CEO.
“I will continue to be a large shareholder in the company and will continue to serve as a member of the board of directors,” he noted.
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.
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.
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.
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.