It was ‘consensual affair,’ says probe against Flipkart’s Bansal: Report
Binny Bansal, 37, stepped down immediately following an independent probe into the allegations, which the executive denies, Walmart said. The accusation came in late July, according to a person with knowledge of the matter, who requested anonymity because the details aren’t public.Updated: Nov 15, 2018 00:00 IST
The co-founder and chief executive officer of Indian e-commerce company Flipkart Group resigned after an investigation into allegations of sexual assault, dealing a blow to owner Walmart Inc.’s ambitions in that country.
Binny Bansal, 37, stepped down immediately following an independent probe into the allegations, which the executive denies, Walmart said. The accusation came in late July, according to a person with knowledge of the matter, who requested anonymity because the details aren’t public. The person said the accuser was a former Flipkart employee, while a second person familiar with the situation said the woman never worked there.
“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.
Investigators concluded Bansal and the woman had a consensual affair, the people said.
Walmart completed its $16 billion purchase of a majority stake in the Indian company in August in a deal that lifted Bansal’s net worth to $1 billion.
The resignation is an embarrassment for Walmart in one of its most important international markets. Flipkart is in a fierce tussle with rival Amazon.com Inc. as millions of Indians embrace e-commerce, with both retailers pushing to attract consumers with massive discounts and exclusive products. Walmart has placed a huge bet on the unprofitable Flipkart unit, which the company has said will reduce earnings in coming years.
Walmart didn’t 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, a unit of Flipkart Group, will now report directly to the board, Walmart said. A succession plan is being accelerated, said the company, as Bansal had been contemplating a transition for some time.
Krishnamurthy joined Flipkart in 2013 as its interim chief financial officer and then took the lead in January 2017. He spent seven years in EBay Inc.’s Asia finance operations before joining Tiger Global as its finance director in 2011.
Walmart shares fell 1 percent in New York. The company is scheduled to report quarterly results on Thursday.
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.
First Published: Nov 14, 2018 09:54 IST