Binny Bansal, chief executive of Indian ecommerce platform Flipkart Group, resigned abruptly on Tuesday following an investigation into “an allegation of serious personal misconduct.”
This comes just six months after his fellow co-founder left the ecommerce company. And while details are sparse, it at the very least is not an ideal development for U.S. retail giant Walmart, which paid $16 billion for a majority stake in the company in May in order to advance ecommerce in India.
According to a joint statement from Walmart and Flipkart, Bansal “strongly denies the [unspecified] allegation … [and] 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. Because of this, we have accepted his decision to resign.”
Walmart had no comment beyond the statement, and Flipkart did not respond to a request for comment. A reporter for the Times of India said the law firm Shardul Amarchand Mangaldas conducted the investigation, however, reps for the firm did not respond to a request for comment either.
The English language newspaper the Bangalore Mirror said Bansal might be the latest executive to fall from grace as a result of the #MeToo movement, citing unnamed sources who said the complainant was “associated with Flipkart a few years ago and is now running her own venture.” But the report also noted the claim had not been independently verified.
Kalyan Krishnamurthy, who has served as chief executive of Flipkart since January 2017, will continue to lead the company. The Times of India reporter also posted a statement on Twitter from Bansal to Flipkart employees that cited “certain personal events that have taken place in the recent past,” adding, “these have been challenging times for my family and me.”
Bansal also said he will continue to be a large Flipkart shareholder and serve on the board of directors.
The Walmart/Flipkart statement also said Bansal, who ranked #1427 on Forbes’ richest people in the world in 2016 with a net worth of $1.2 billion, had already been working on an exit strategy and the succession plan “has now been accelerated.”
That’s why Manolo Almagro, managing partner at business management consultancy Q Division, doesn’t think this is that big of a deal for Bansal.
“I imagine he didn’t want his name dragged through the mud when the details of the investigation came out,” he said. “While I think this is sort of an embarrassment to Walmart, and it was their corporate responsibility to respond asap to the allegations in light of all of the recent press about big tech companies giving senior-level execs a pass—like what Google did recently—when it comes to #MeToo-like issues.”
In May, Bansal called Walmart “the ideal partner” for “the next phase of our journey.” But sources said it was also a do-or-die deal for Walmart in India, which could be the next China, thanks to its huge population and growing middle class.
Walmart and Amazon are indeed duking it out around the globe, China and India included. In India, competitive intelligence tool SimilarWeb says Amazon has the edge with the country’s first and third most popular shopping sites, with Flipkart in the middle.
There has been some skepticism about whether India will live up to these ecommerce expectations, given factors like language fragmentation, illiteracy and lower median income.
In the meantime, reports say Krishnamurthy told employees there would be no changes in operations or to Flipkart’s mission as a result of the leadership change. Like at Instagram, whose co-founders also recently left, time will tell what the actual impact will be.