NOVEMBER 13, 2018
BENGALURU – The co-founder and chief executive officer of Indian e-commerce company Flipkart Group has resigned after an investigation into allegations of “serious personal misconduct,” owner Walmart Inc. said.
Binny Bansal, 37, stepped down immediately following an independent probe into the allegations, which the executive denies, Walmart said. The U.S. retail giant completed its $16 billion purchase of the Indian company in August in a deal that lifted Bansal’s net worth to $1 billion.
“While the investigation did not find evidence to corroborate the complainant’s assertions against Binny, it did reveal other lapses in judgment, particularly a lack of transparency, related to how Binny responded to the situation,” Walmart said in a statement.
Walmart did not detail the nature of the allegations. “This has been an unfortunate and challenging situation for Binny, his family and Flipkart,” the e-commerce provider said in a separate internal note.
Kalyan Krishnamurthy, currently chief of the Flipkart division, will report directly to the board, Walmart said. The succession plan has now been accelerated, said the company, as Bansal had been contemplating a transition for some time.
Walmart shares were little changed in premarket trading in New York.
The resignation is a blow for Walmart in India, where Flipkart sales has held its own against rival Amazon.com Inc. Flipkart even continued its lead in the recent annual sale season in October when both retailers made a big push with massive discounts and exclusive products.
Bansal co-founded Flipkart in 2007. As recently as October, he said in an interview that he was still in charge of Flipkart and would remain group CEO after the Walmart acquisition.
“Both sides are convinced that keeping Flipkart running independently makes the most sense,” he told Bloomberg. “It’s a board-managed company and decision making is still done the exact same way.”
During the interview, he discussed Flipkart’s strategy to snag the next 100 million customers including using native languages, giving buyers more access to credit and launching inexpensive products under Flipkart’s private labels.