Flipkart Group’s chief executive Binny Bansal has resigned following an internal investigation into “an allegation of serious personal misconduct”, Walmart said in a statement on Tuesday.
While Walmart did not disclose the nature of the misconduct, it said that the probe did not find any evidence to substantiate the complainant’s claims against Bansal.
“His (Bansal’s) decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct. He strongly denies the allegation. Nevertheless, we had a responsibility to ensure the investigation was deliberate and thorough. 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,” the statement said.
In May, U.S. retail giant Walmart had acquired a 77% stake in the ecommerce firm for $16 billion, making it the largest cross-border M&A deal involving an Indian business, and the largest foreign direct investment (FDI) in the country. Walmart’s investment included $2 billion of new equity funding to help Flipkart accelerate growth in the future. The transaction valued the Bengaluru-headquartered firm at a whopping $20 billion and also marked Walmart's entry into the Indian ecommerce space.
Started in 2007 in a one bedroom setup in Bengaluru by two friends Sachin Bansal and Binny Bansal, Flipkart is today’s India’s largest ecommerce company. Often called India’s answer to Amazon, with which it competes fiercely in India, it has raised nearly $6 billion from global marquee investors such as Accel Partners, Tiger Global, Naspers, Morgan Stanley, and SoftBank before Walmart acquired it. Sachin Bansal left the company soon after Walmart acquired Flipkart. The U.S. retailer was more in favour of having Binny Bansal as top executive.
Walmart says Binny Bansal had been contemplating a transition for some time and a succession plan was being worked on. Kalyan Krishnamurthy will continue to be CEO of Flipkart, which will now include Myntra and Jabong; these will continue to operate as separate platforms. Ananth Narayanan will continue as CEO of Myntra and Jabong, and will report to Krishnamurthy. Sameer Nigam, who will continue to be PhonePe CEO, and Krishnamurthy will report directly to the board.
In the meantime, in a mail to Flipkart employees, Bansal said the claim of personal misconduct made against him was “uncorroborated.” Here’s the full text of Bansal’s letter to Flipkart employees:
Dear Flipkart Family, Since co-founding Flipkart with modest resources in 2007, the journey we have embarked on together has been arduous and rewarding, culminating with the fantastic news of our partnership with Walmart earlier this year. They have been great partners and I am optimistic about our future together. For some time, I have been mulling over the right time to step away from an operating role at Flipkart Group. 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.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. The allegations left me stunned and I strongly deny them. The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation. These have been 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.I will continue to be a large shareholder in the company and will continue to serve as a member of the Board of Directors. I am convinced that the company is in great hands with our experienced leaders - Kalyan, Ananth and Sameer. They have done an exceptional job running the businesses for many years now and with the support of Walmart that I have experienced, will continue to lead the company to even greater successes in the future. Thank you for all the goodwill that you’ve shown towards me over the years. I’m grateful to have had the opportunity to help get us to where we are today. I look forward to seeing Flipkart scale greater heights in the coming years. Thank you, Binny
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