Flipkart CEO resigns amid 'misconduct' allegations

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The chief executive of Flipkart Group, Walmart Inc's Indian e-commerce business, resigned following an internal probe into accusations of "serious personal misconduct," Walmart said Tuesday.

The misconduct accusations followed an allegation of sexual assault, two people familiar with the matter said.

The departure of Binny Bansal, 37, one of the co-founders of Bangalore-based Flipkart, could be a setback for Walmart's efforts to compete with Amazon.com in India's huge 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 year.

Walmart paid 16 billion US dollars for a roughly 77-percent stake in Flipkart in May, completing the deal in August.

The investment is the US retailer's biggest acquisition and was a major move in its efforts to compete against Amazon's growing market share at home and abroad.

In a note sent to Flipkart employees, which was seen by Reuters, Bansal said recent events led him to step down from his role as chairman and CEO.

He said the events related to a claim of misconduct against him, “which was uncorroborated after a thorough investigation completed by an independent law firm.”

Bansal did not give details of the nature of the claim.

Binny Bansal, pictured in Bangalore, July 2017 /VCG Photo

“The allegations left me stunned, and I strongly deny them,” he wrote.

"The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation," he said, without elaborating further.

Walmart said in a filing that it conducted its own investigation into the allegations, without telling what the accusations were.

"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.

"Because of this, we have accepted his decision to resign."

Hailing from the northern Indian city of Chandigarh, Bansal is one of India's best-known entrepreneurs after starting Flipkart in 2007 with Sachin Bansal.

The duo, who hail from the same city but who are not related, formed Flipkart shortly after quitting 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 technology start-up.

Walmart said Bansal had been contemplating a transition for some time and that the companies had been working together on a succession plan, which had now been accelerated.

In his note to Flipkart employees, Binny Bansal said that he recently had thought he might continue as CEO for “a few more quarters.”

Kalyan Krishnamurthy, who heads the company's main Flipkart e-commerce operation, would now act as chief executive for a broader group of businesses including apparel websites Myntra and Jabong, Walmart said.

The social media #MeToo movement against sexual harassment that began in the United States over a year ago has gained traction in India in recent weeks.

Source(s): Reuters