Flipkart co-founder and group chief executive Binny Bansal on Tuesday abruptly resigned from the company, following an internal investigation into an allegation of “serious personal misconduct”, sending shockwaves across India’s startup ecosystem. Walmart-owned Flipkart didn’t specify the allegation but one person familiar with the matter said it was related to an alleged sexual harassment by Bansal in 2016.
The investigation did not find any evidence to support the allegation that was made by the complainant. But it showed “lapses in judgement” on Binny Bansal’s part, said Walmart, adding that the episode revealed “particularly a lack of transparency, related to how Binny responded to the situation”.
“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. His decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct. He strongly denies the allegation,” Walmart said in a statement on Tuesday.
Binny Bansal, in a letter to Flipkart employees, “strongly denied” all allegations of serious personal misconduct made against him, Reutersreported on Tuesday. “My plan was to continue in my current role for a few more quarters to continue transition after closing deal with Walmart... My decision to step down has been accelerated by certain personal events that have taken place in the recent past,” he said in the letter.
According to another person aware of the development, Bansal will remain on the board of Flipkart and continue to be a shareholder in Flipkart for now. Bansal owns shares worth $700-800 million in Flipkart and was contracted to stay on at the company till 2020.
Bansal’s ouster comes months after his fellow Flipkart founder Sachin Bansal was also forced out of the company during its sale talks with Walmart in April, following a bitter fallout with the then board of Flipkart. In May, Walmart agreed to buy 77% in Flipkart for $16 billion.
Binny Bansal’s exit marks the end of an era at not just Flipkart, but also for the entire Indian startup ecosystem, which has bestowed rockstar status on the two Bansals (not related), as their success with Flipkart inspired a new generation of entrepreneurs.
The latest development effectively hands over control of the entire group to Flipkart CEO and former Tiger Global Management executive Kalyan Krishnamurthy, who has been running the e-commerce firm since his return to Flipkart in June 2016.
Walmart said that Myntra and Jabong, which till now had operated as independent platforms within the Flipkart Group, will now be rolled into Flipkart’s core e-commerce business, which is led by Krishnamurthy.
Myntra and Jabong CEO Ananth Narayanan will now report to Krishnamurthy. Walmart also added that both Krishnamurthy and PhonePe CEO Sameer Nigam will now report directly to the board of Flipkart.
Walmart also added that Binny Bansal has been contemplating a transition for some time and that the company had been working on a succession plan, which has now been accelerated.
Mint first reported on 24 September that Flipkart was considering naming a new CEO at the group level to replace Bansal, who took over the chairman’s role in May after former chairman Sachin Bansal left Flipkart over differences with the company’s board.
Mint had also reported that Krishnamurthy was the frontrunner to take over from Bansal.
Walmart did not reveal any further details about the incident. Mint could not immediately verify what transpired during the alleged incident.