Flipkart co-founder Binny Bansal resigned as the company’s Group CEO Tuesday following an independent investigation into allegations of “serious personal misconduct”, according to a statement by Flipkart’s patent firm Walmart. In a joint statement, the two companies said that though Bansal “strongly denies the allegation”, the investigation revealed “other lapses in judgment” and “a lack of transparency”. “Binny (Bansal) 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,” it said. According to Reuters, the investigation against Bansal “stemmed from an allegation of sexual assault that dates back a few years”. Quoting a “person familiar with the matter”, Reuters said: “In late July … an allegation came to us. It was a claim of sexual assault against Binny,” adding that the individual concerned was a former Flipkart associate who was not with the company at the time of making the allegation.
His resignation, “with immediate effect”, comes months after Walmart Inc announced the acquisition of 77 per cent stake in Flipkart in May this year for $16 billion. The deal was India’s biggest merger and acquisition and the largest for the US-based Walmart and brought the two companies together against rival e-commerce giant Amazon.
Bansal is the biggest name in corporate India to resign in the wake of the #MeToo movement that has swept across the country, particularly in film, media and entertainment. While former Editor M J Akbar, who has been accused of sexual harassment by over a dozen women, resigned as Minister of State (External Affairs), The Indian Express, on November 1, reported that former Taj Hotels staffer Anjuli Pandit’s had complained of sexual harassment against former Taj Hotels CEO and MD Rakesh Sarna and that she knocked on many doors but few heard her out.
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In a letter to employees, Bansal said: “The allegations left me stunned and I strongly deny them. The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation.”
He also said that these were “challenging times” for him and his family, and in light of these circumstances, he felt it was best to step away as chairman and Group CEO.
“I will continue to be a large shareholder in the company and will continue to serve as a member of the board of directors,” he said.
Walmart also announced that Kalyan Krishnamurthy will “continue to be CEO of Flipkart, which will now include Myntra and Jabong, continuing to operate as separate platforms within the Flipkart business.”
According to the statement, “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. Nevertheless, we had a responsibility to ensure the investigation was deliberate and thorough.”
“While the investigation did not find evidence to corroborate the complainant’s assertions against Binny, it did reveal other lapses in judgement, particularly a lack of transparency, related to how Binny responded to the situation. Because of this, we have accepted his decision to resign,” the statement said.