The chief executive of Flipkart Group, Walmart Indian e-commerce Company, resigned following an internal probe into accusations of”serious personal misconduct,” Walmart Stated Tuesday.
The misconduct accusations followed an allegation of sexual assault, two individuals knowledgeable about the issue said.
The departure of Binny Bansal, 37, one of those co-founders of Bangalore-based Flipkart, could be a setback for Walmart’s efforts to compete with Amazon at India’s enormous consumer market. A tech-savvy billionaire, Bansal took over as CEO of Flipkart in 2016. He became the chairman and group CEO of the e-commerce company this past year.
The investment is that the U.S. merchant’s biggest acquisition and was a significant move in its efforts to compete against Amazon’s growing market share at home and abroad.
Walmart announced it would acquire the stake at Flipkart in May and completed the deal in August. In a note delivered to Flipkart employees, which had been seen by Reuters, Bansal said recent events directed him to resign from his job as chairman and CEO. He explained the events related to a claim of misconduct against him,”that was uncorroborated after a comprehensive evaluation completed by an independent law firm.”
Bansal didn’t provide details of the nature of this claim.
“The analysis, however, did bring to light lapses in judgment, especially a lack of transparency, related to the way I reacted to the situation,” he said, without elaborating further.
Neither Bansal nor his agents reacted to requests for comment. Flipkart didn’t respond to requests for comment.
A person in the United States acquainted with all the Walmart investigation said”a promise of sexual attack against Binny” came to its focus in late July. The accusation obsolete to some couple of years earlier and was created with a former Flipkart partner, who was not with Flipkart at the moment, the person added.
Walmart said in a filing which it conducted its own investigation into the allegations, without saying exactly what the accusations were.
“While the investigation didn’t find evidence to corroborate the complainant’s assertions contrary to Binny, it did show different lapses in judgment, particularly a lack of transparency, related to the way Binny reacted to the situation.” Walmart said. “Due to this, we’ve accepted his decision to step up.” The individual familiar with the issue at Walmart said that Bansal had hired two private security firms at the end of 2016,”to make this thing go away,” referring to the alleged assault claim. The individual didn’t disclose the names of the security company or the parties involved and Reuters was unable to affirm them.
“Binny had an chance to disclose such allegations to us when we were in discussions (to invest in Flipkart). .but he did not,” the man said.
Hailing from the northern Indian city of Chandigarh, Bansal is one of India’s best-known entrepreneurs after beginning Flipkart in 2007 with Sachin Bansal. The duo, who hail from precisely the exact same city but who aren’t connected, formed Flipkart shortly after stopping Amazon.
Originally an online bookstore run out of a two-bedroom apartment in India’s technology hub of Bengaluru, Flipkart grew over the next decade to become India’s most valuable tech startup. Its units comprise Flipkart, which sells general merchandise, the clothing and accessories retailer Myntra, the fashion portal Jabong and PhonePe obligations app. Walmart has stated it may make an initial public offering of Flipkart publicly within the next four years.
Another source directly briefed on the topic in India, that did not wish to be named, stated Bansal is still a shareholder in Flipkart and hasn’t expressed any desire to sell his stake. Walmart hasn’t offered to buy him out, the source added.
Walmart said Bansal had been contemplating a transition for a while and that the companies had been working on a succession plan, which had been accelerated. In his notice to Flipkart employees, Binny Bansal reported that he had believed he would continue as CEO to get”a couple more quarters.”
Kalyan Krishnamurthy, who directs the Organization’s main Flipkart e-commerce operation, would now become chief executive for a wider group of companies including apparel sites Myntra and Jabong, Walmart Stated
Ananth Narayanan, who is the CEO of Myntra and Jabong, will continue in these roles and will now report to Krishnamurthy.
The social media #MeToo motion against sexual harassment which began in the USA over a year past has gained traction in India in recent weeks.
Walmart’s shares traded 1.15 percent at $102.68 (roughly Rs. 7,400) per share in afternoon trade.