Binny Bansal, who on Tuesday resigned as Flipkart's Chairman and Group CEO, has said he was "stunned" by allegations of personal misconduct against him and it was best that he steps away.
"These have been challenging times for my family and me. I am concerned that this may become a distraction for the company and the team. In light of these circumstances, I feel, it is best to step away as Chairman and Group CEO,” wrote Binny in the email which has been reviewed by Business Standard.
His decision followed an investigation into an allegation of "serious personal misconduct" leveled against him.
While the investigation, which was conducted by an independent law firm, could not corroborate the complainant's assertions against Bansal, it did find serious lapses in his judgement and a lack of transparency in how he dealt with the situation, Walmart said in a disclosure to the US Securities and Exchange Commission (SEC).
The Bentonville-headquartered company which acquired 77 per cent stake in Flipkart in May for $16 billion also told the US market regulator that it had accepted his decision to resign, though the global retail major did not outline the exact specifics of the allegations leveled against Bansal.
Separately, in a mail sent to Flipkart group employees, Bansal said that he would have liked to stay on as the CEO of the company for a few more quarters to continue the transition after closing the deal with Walmart. However, he added, the allegations “stunned” him while he continues to strongly deny them.
Post stepping down as the Group CEO & chairman, Bansal would continue to hold his stake in Flipkart, which stands at around 5 per cent.
He would also continue with his position on the board of the company, he wrote.
The Walmart’s filing with the SEC said that Bansal was mulling stepping down from running the company for a while, but his decision was accelerated by the findings of the investigation.
Kalyan Krishnamurthy, CEO of Flipkart will continue to lead the company with the added responsibility of overseeing two of subsidiaries - Myntra and Jabong, and will report directly to the board. Ananth Narayanan, CEO of Myntra and Jabong will now report to Krishnamurthy, while Sameer Nigam, the CEO of payments subsidiary PhonePe will directly report to the Board.
“As we look ahead, we have full confidence in the strength and depth of leadership across the company. We remain committed to investing for the long-term and are supportive of the leadership team’s desire to evolve into a publicly-traded company in the future,” the Walmart statement added. It however did not outline any succession plan to fill the post of Group CEO.
The stepping down of Binny Bansal comes after the unceremonious exit of Flipkart co-founder Sachin Bansal soon after Walmart announced it was coming onboard as an investor in May. Sachin Bansal is said to have received in excess of $1 billion in return for his 5.5 per cent stake in the company.
Sachin Bansal and Binny Bansal founded Flipkart in 2007, after quitting their jobs at US online retail giant Amazon. The two have gone on to become the poster boys of India’s startup sector, having built the most valuable private e-commerce from the country, last valued at over $20 billion when Walmart backed it.