It took about 24 hours for Binny Bansal to go from Group CEO and Chairman of Flipkart to being forced to step down following allegations of personal misconduct. In fact, he reportedly learnt about the findings of the independent investigation that Walmart had initiated after a former Flipkart employee accused him of sexual harassment just a day before he resigned.
Bansal was contacted by lawyers from Walmart on Monday, The Economic Times reported, and events moved fast thereafter. Sources told the daily that while it's still unclear what the US retailer and Flipkart's largest shareholder asked as immediate action from Bansal, the 35-year-old cofounder soon realised that he would have to step down.
"Binny sent out an email at 11 am on Tuesday, catching some of the board members unawares," a person in the know told the daily. Subsequently, at 3 pm he informed Flipkart's top management about his departure and a mail was sent to employees two hours later.
The investigation that proved Bansal's Waterloo was initiated in July, when the former Flipkart employee, who had served as a call centre executive at the company for a few months in 2012, approached Walmart Global with her allegations post the announcement of its deal to buy a 77% stake in the e-tailer. The woman reportedly wrote to Walmart CEO Doug McMillon about Bansal's misconduct, and the company then hired an international law firm, Gibson Dunn, to look into the matter.
Although the investigation found no evidence to corroborate the complainant's charges, it threw up a case of "serious personal misconduct" in the way Bansal handled the fallout of a consensual relationship "which went south", sources told the daily. They added that relationship between the two took shape in 2016, much after she had left the company, and that Bansal had made some payments to her.
Bansal became the CEO of Flipkart in January 2016 and was elevated to Group CEO a year later, after Kalyan Krishnamurthy was appointed Flipkart CEO. "There was no formal or statutory complaint made by the woman in question. The investigation was being handled by Walmart US but there may be some top officials at Flipkart who were aware of the ongoing investigation and may have triggered the revival of the case in 2018," a source said.
Interestingly, Bansal has reportedly not seen full report of the investigation conducted by the law firm due to client confidentiality between Walmart and the law firm.
The cryptic statement issued by Walmart on Tuesday evening simply stated that an independent investigation had been conducted against Bansal following allegations of "serious personal misconduct" but shared no details about the nature of the misconduct and findings of the probe. "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 Walmart statement read. It added that the events surrounding the allegations had "risked becoming a distraction", prompting Bansal's decision to step down.
In his letter to Flipkart employees, Bansal, too, had hinted at a lapse of judgement. "The allegations left me stunned and I strongly deny them. The investigation, however, did bring to light lapses in judgement, particularly a lack of transparency, related to how I responded to the situation," read his letter. "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," he said. However, he made it clear that he intends to continue to serve as a member of the Board of Directors.
Bansal's exit, so soon after that of Flipkart's other co-founder, Sachin Bansal, has raised questions around leadership and the company's course of action over the next few months at a time it is locked in an intense battle with arch rival, Amazon.
Edited by Sushmita Choudhury Agarwal