Flipkart CEO Binny Bansal quits after misconduct probe
BENGALURU: Flipkart co-founder and group chief executive officer Binny Bansal has abruptly resigned from the company, following an internal investigation into an allegation of “serious personal misconduct,” sending shockwaves across India’s start-up ecosystem.
Walmart-owned Flipkart didn’t specify the allegation.
The investigation did not find any evidence to support the allegation that was made by the complainant. But it showed “lapses in judgement” on Bansal’s part, said Walmart, adding that the episode revealed “particularly a lack of transparency, related to how Binny responded to the situation.”
Bansal didn’t respond to text messages or calls seeking comment. However, in an email to Flipkart employees, Bansal said he had been mulling over the right time to step away from an operating role at Flipkart Group for some time. “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 his email, reported PTI.
“The allegations left me stunned and I strongly deny them,” he added.
“Binny has been an important part of Flipkart since co-founding the company, but recent events risked becoming a distraction and Binny has made a decision to step down. His decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct,” a statement by Walmart said.
“He strongly denies the allegation,” it added.
Bansal, in the email, noted that he will “continue to be a large shareholder in the company and will continue to serve as a member of the board of directors”. Bansal owns shares worth $700800 million in Flipkart and was contracted to stay on at the company till 2020.
Bansal’s ouster comes months after his fellow Flipkart founder Sachin Bansal was forced out of the company during its sale talks with Walmart in April, following a bitter fallout with the then board of Flipkart. In May, Walmart agreed to buy 77% of Flipkart for $16 billion.
Binny Bansal’s exit marks the end of an era at not just Flipkart, but also for the entire Indian start-up ecosystem, which has bestowed rockstar status on the two Bansals (not related), as their success with Flipkart inspired a new generation of entrepreneurs.
The latest development effectively hands over control of the entire group to Flipkart CEO and former Tiger Global Management executive Kalyan Krishnamurthy, who has been running the e-commerce firm since his return to Flipkart in June 2016.
Walmart said that Myntra and Jabong, which till now had operated as independent platforms within the Flipkart Group, will now be rolled into Flipkart’s core e-commerce business, which is led by Krishnamurthy.
Myntra and Jabong CEO Ananth Narayanan will now report to Krishnamurthy.
Walmart also added that both Krishnamurthy and PhonePe CEO Sameer Nigam will now report directly to the board of Flipkart.
Walmart also added that Bansal has been contemplating a transition for some time and that the company had been working on a succession plan, which has now been accelerated.
Mint first reported on September 24 that Flipkart was considering naming a new chief executive at the group level to replace Bansal.