The chief executive of Flipkart Group, Walmart Indian e-commerce Company, resigned following an internal probe into 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 huge consumer market. A tech-savvy billionaire, Bansal took over as CEO of Flipkart in 2016. He became the chairman and group CEO of the e-commerce company this year.
The investment is the U.S. merchant’s biggest acquisition and has been a significant move in its attempts to compete against Amazon’s rising market share at home and overseas.
Walmart announced it would acquire the stake at Flipkart in May and completed the deal in August. In a note sent to Flipkart employees, which was seen by Reuters, Bansal said recent events led 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 after a comprehensive investigation completed by an independent law firm”
Bansal didn’t give details of the nature of the claim. “The allegations left me amazed and I strongly deny them,” he wrote.
“The analysis, however, did bring to light lapses in judgment, especially a lack of transparency, associated with the way I responded to the circumstance,” he said, without elaborating further.
Neither Bansal nor his representatives reacted to requests for comment. Flipkart didn’t respond to requests for comment.
A person in the United States familiar with the Walmart investigation said”a promise of sexual assault against Binny” came to its focus in late July. The accusation obsolete to a couple of years before and was made by a former Flipkart associate, who was not with Flipkart in the moment, the person added.
Walmart said in a filing that it conducted its own investigation into the allegations, without stating exactly what the accusations were.
“While the analysis did not find evidence to corroborate the complainant’s assertions contrary to Binny, it did reveal other lapses in judgment, especially a lack of transparency, related to the way Binny reacted to the situation.” Walmart said. “Because of this, we’ve accepted his decision to resign.” The person familiar with the matter at Walmart said that Bansal had hired two private security companies at the end of 2016,”to make this thing go away,” referring to the alleged attack case. The person didn’t disclose the names of their security firm or the parties involved and Reuters was not able to affirm them.
“Binny had an chance to disclose such allegations to us when we had been in discussions (to invest in Flipkart). .but he did not,” the person said.
The duo, who hail from precisely the same city but who are not related, formed Flipkart shortly after quitting Amazon.
Originally an online bookstore run from 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 components include Flipkart, which sells general merchandise, the accessories and clothing retailer Myntra, the fashion portal Jabong and PhonePe obligations app. Walmart has said it may make an initial public offering of Flipkart publicly within the next four decades.
A separate source directly briefed on the topic in India, who didn’t wish to be named, said Bansal is still a shareholder in Flipkart and hasn’t expressed any desire to sell his stake.
Walmart stated Bansal had been considering a transition for a while and that the companies had been working together on a succession plan, which had now been accelerated. In his notice to Flipkart workers, Binny Bansal said that he recently had believed he would continue as CEO for”a few more quarters.”
Kalyan Krishnamurthy, who directs the company’s main Flipkart e-commerce performance, would now become chief executive for a broader group of companies including apparel websites Myntra and Jabong, Walmart said
Ananth Narayanan, who’s the CEO of Myntra and Jabong, will continue in these jobs and will now report to Krishnamurthy.
The social media #MeToo motion against sexual harassment that started in the United States over a year past has gained traction in India lately.
Walmart’s shares traded 1.15 percent at $102.68 (approximately Rs. 7,400) per share in afternoon trade.