Flipkart chief executive resigns after probe into ‘serious personal misconduct’
Binny Bansal, the founder and chief executive of Flipkart - India's biggest e-commerce company, has resigned after an allegation of “serious personal misconduct” just months after the company was acquired by Walmart.
The 37-year-old entrepreneur, who co-founded Flipkart in 2007, is one of the most well-known of India's young self-made billionaires. Two people familiar with the matter said the accusations around Mr Bansal are alleged to involved sexual assault.
In a letter sent to Flipkart employees, he said "the allegations left me stunned" . His resignation is effective immediately following an investigation by an independent law firm.
Based in Bangalore, Flipkart received a $16bn investment from Walmart in May which handed the US company a 77pc stake. The deal, designed to bolster Walmart's position in India against US giant Amazon, was the largest acquisition in the company's history and made Flipkart a key asset in its international expansion plans.
Kalyan Krishnamurthy, chief executive of Flipkart, will continue in his role and assume new responsibilities in overseeing Myntra and Jabong, online fashion retailers owned by Flipkart. He has been a crucial figure in Flipkart’s battle against Amazon’s Indian subsidiary in the country.
In a regulatory filing to the US Securities and Exchange Commission, Walmart and Flipkart said: “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.”
Both companies acknowledged the importance of Mr Bansal’s role since co-founding Flipkart, but said “recent events risked becoming a distraction” and that they had a responsibility to ensure “the investigation was deliberate and thorough”.
The filing suggests that Walmart maintains confidence in the leadership of Flipkart, and remain committed to investing for the long-term and support the Indian company’s ambitions to “evolve into a publicly-traded company”.
Walmart’s plans in the southeast Asian region involve the support of national initiatives that can create jobs and support small businesses.
"This certainly is a hiccup," Harish Bijoor, an industry consultant based in Bengaluru told Reuters.
"(It) raises the question of what plans are ahead for Flipkart. The path the company will take will have a trajectory which is controlled by new investors."
Mr Bansal strongly denies the allegation.
