Flipkart CEO steps down in wake of misconduct allegations
Investigation didn’t find evidence to corroborate accusations
Walmart Inc. said the chief executive of Flipkart Group, its Indian e-commerce business, has resigned following an independent investigation into personal misconduct allegations.
Binny Bansal, one of the cofounders of Bangalore-based Flipkart, decided to step down after “recent events risked becoming a distraction,” Walmart said Tuesday.
While the investigation didn’t find evidence to corroborate complaints against him, it revealed other “lapses in judgment,” and a “lack of transparency” in how Mr. Bansal responded to the situation, the company said.
Mr. Bansal has strongly denied the allegations against him, Walmart said.
The company said Mr. Bansal had already been contemplating leaving the role and was working with the company on a succession plan.
Walmart didn’t elaborate on the allegations in its statement.
“These events relate to a claim of serious personal misconduct made against me, which was uncorroborated after a thorough investigation completed by an independent law firm,” Mr. Bansal said in email sent to staff that was provided by a spokesman for Walmart and Flipkart. “The allegations left me stunned and I strongly deny them.”
Mr. Bansal didn’t respond to the Journal’s request for comment.
Kalyan Krishnamurthy, who has led the Flipkart unit since 2017, will now oversee the company’s two online fashion retailers Myntra and Jabong. Ananth Narayanan, who is the CEO of Myntra and Jabong, will report to him. Walmart purchased a 77% stake in Flipkart for $16 billion earlier this year, its largest-ever acquisition, making the company a cornerstone of Walmart’s plans to remake its international portfolio.
After the deal, Judith McKenna, chief executive of Walmart International, hailed Flipkart’s top brass. “It’s got scale, it’s got growth, but it’s also got a great management team,” she said of the startup.
Online retail in India is growing quickly as inexpensive smartphones and cheap mobile data plans proliferate and shoppers become more comfortable paying online. Online retail in India was worth about $20 billion last year but is expected to rise to $35 billion by 2019, according to research firm Forrester.
Amazon.com Inc. founder Jeff Bezos has pledged to invest $5 billion in India, and the Seattle company has made rapid gains against Flipkart in recent years.
Mr. Bansal and Sachin Bansal, who share the same last name but are unrelated, founded Flipkart in 2007, having both worked earlier at Amazon Web Services in India.
Like Amazon, Flipkart began by selling books, expanding quickly over the years to sell everything from smartphones to spices.
“This is a distraction for the company,” said Satish Meena, an analyst at Forrester.
“It will take some time to digest for the employees.”
“Sachin was the person who was the visionary,” said Mr. Meena. “Binny was more of an operational guy,” he said, though he said Mr. Krishnamurthy had been running most day-to-day aspects at the firm of late.
Investigation revealed other “lapses in judgment” and a “lack of transparency” in how Binny Bansal responded to complaints against him