By Elton Gomes
Binny Bansal, chief executive Officer and co-founder of Flipkart Group, has resigned from his post after facing “allegation of serious personal misconduct“, Walmart Inc. and Flikart said in a joint statement on Tuesday.
“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,” Walmart and Flikart said in the statement. “His decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct.”
In an email sent to Flipkart employees after his resignation, Bansal wrote, “The allegations left me stunned and I strongly deny them.” However, the Flipkar co-founder has not elaborated on the nature of the allegation against him, but acceded in the email that “the investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation.”
Bansal said that he will remain on the company’s board of directors. In his email, Bansal said he will continue to be on the Flipkart board as one of its largest shareholders.
Kalyan Krishnamurthy, who heads Flipkart’s main e-commerce operations, will take on the role of chief executive officer for a broader group of businesses, including apparel websites Myntra and Jabong, Walmart said.
“This certainly is a hiccup,” said Harish Bijoor, an industry consultant based in Bengaluru. “[It] raises the question of what plans are ahead for Flipkart. The path the company will take will have a trajectory which is controlled by new investors,” the Telegraph reported.
What we know about the allegation?
The nature of the allegation is still unclear, but Reuters claimed that Bansal’s resignation was due to an allegation of sexual assault that dates back a few years.
A person knowledgeable of the matter told Reuters, “In late July … an allegation came to us. It was a claim of sexual assault against Binny,” as per a report in the Indian Express. The source further said that the complainant no longer worked at Flipkart.
Shereen Bhan, managing editor of CNBC-TV 18, tweeted that Walmart first learnt of the allegation in late July, and that the allegation does not involve a Flipkart employee.
— Shereen Bhan (@ShereenBhan) November 13, 2018
In another tweet, Bhan cited sources who said that there was “no conclusive evidence against Bansal.”
Walmart said something similar in its statement, “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.”
Binny Bansal: A key figure in the Flipkart-Walmart deal
Alongside Flipkart CEO Kalyan Krishnamurthy and Tiger Global’s Lee Fixel, Binny Bansal was widely regarded as a key figure in finalising the largest deal in Walmart’s history. The Flipkart–Walmart deal cemented Flipkart’s position in India and gave the Indian company enough firepower to take on Jeff Bezos’s Amazon.
The deal was complete in May after Walmart picked up a 77 percent stake in Flipkart for $16 billion. The deal saw its completion after more than 20 months of talks, and was the world’s biggest purchase of an e-commerce company. The deal included $2 billion of fresh investment, which pegged Flipkart’s value at $22 billion.
Flipkart has been dominating the Indian online space after it acquired Myntra, which then bought rival Jabong. Flipkart would undoubtedly benefit from Walmart’s deep pockets as well as its exceptional experience in decades of retailing expertise.
Who is Binny Bansal?
A computer science student, Binny began his career with Sarnoff Technologies. He was considered a pioneer in computer vision, and worked with Sarnoff for one-and-a-half years.
Binny failed to get accepted at Google twice, and ultimately joined Amazon, where he met Sachin Bansal. Sachin and Binny (not related) then founded Flipkart as an online bookstore in 2007.
Both Sachin and Binny hail from Chandigarh, studied at IIT-Delhi, graduated in 2005, and have worked at Amazon. The co-founders started Flipkart with their savings of Rs 7-8 lakh and initially worked out of an apartment in Koramangala.
Known to be analytical and data-driven, Binny was instrumental in building Flipkart’s supply-chain business under eKart. Before becoming CEO, he was Flipkart’s chief operating officer.
Elton Gomes is a staff writer at Qrius.
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