Binny Bansal quits as CEO
Flipkart co-founder’s resignation comes after allegation of ‘serious personal misconduct’; to remain on firm’s board
Flipkart co-founder Binny Bansal on Tuesday resigned as chairman and group CEO of the Walmart-backed e-commerce company with immediate effect, following an investigation into an allegation of “serious personal misconduct” against him. A Reuters report said the resignation stemmed from an allegation of sexual assault that dated back a few years. It quoted a person familiar with the matter as saying the complainant was a former Flipkart associate who was not with the company at the time of making the allegation. The news agency could not reach Bansal for comment.
While the investigation, which was conducted by an independent law firm, could not corroborate the complainant’s assertions against Bansal, it found serious lapses in his judgement and a lack of transparency in how he dealt with the situation, Walmart disclosed to the US Securities and Exchange Commission (SEC).
The Bentonville-headquartered company, which acquired a 77 per cent stake in Flipkart in May for $16 billion, said it had accepted Bansal’s decision to resign, though the global retail major did not give the exact details of the allegation. Separately, in an email sent to Flipkart group employees, Bansal said he would have liked to stay on as CEO for a few more quarters to ease the transition after closing the deal with Walmart. However, he added that the allegation “stunned” him, and continued to strongly deny it.
“THE ALLEGATIONS LEFT ME STUNNED AND I STRONGLY DENY THEM. THE INVESTIGATION, HOWEVER, DID BRING TO LIGHT LAPSES IN JUDGEMENT… RELATED TO HOW I RESPONDED TO THE SITUATION” Binny Bansal, Chairman and group CEO, Flipkart
“These have been the challenging times for my family and me. I am concerned that this 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 group CEO,” Bansal wrote in the email, which was reviewed by Business Standard.
Bansal will, however, continue to hold his stake in Flipkart, which stands at around 5 per cent. He would also remain on the company’s board, he said. According to Walmart’s filing with the SEC, Bansal was mulling stepping down from running the company for a while, but his decision was accelerated by the findings of the investigation. Kalyan Krishnamurthy, CEO of Flipkart, will continue to lead the company with the added responsibility of overseeing the two subsidiaries -- Myntra and Jabong -- and will report directly to the board. Ananth Narayanan, CEO of Myntra and Jabong, will now report to Krishnamurthy, while Sameer Nigam, CEO of payments subsidiary PhonePe, will report to the board.
“As we look ahead, we have full confidence in the strength and depth of leadership across the company. We remain committed to investing for the longterm and are supportive of the leadership team’s desire to evolve into a publicly-traded company in the future,” the Walmart statement added. It, however, did not outline any succession plan to fill the post of group CEO.
The stepping down of Binny Bansal comes after the unceremonious exit of Flipkart cofounder Sachin Bansal soon after Walmart announced it was coming on board as an investor in May. Sachin Bansal is said to have received in excess of $1 billion in return for his 5.5 per cent stake in the company. Sachin Bansal and Binny Bansal founded Flipkart in 2007 after quitting their jobs at US online retail giant Amazon. The two have gone on to become the poster boys of India’s start-up sector, having built the country’s most valuable private e-commerce firm, last valued at over $20 billion when Walmart backed it.