Months after Sachin Bansal exited from Flipkart, following its acquisition by the US retail company Waltmart Inc in May, his close friend and Flipkart Group CEO Binny Bansal also stepped down from the company he co-founded in 2007. Binny resigned from Flipkart, which is India's largest e-commerce company by market share, following an investigation by the parent company Walmart over the allegations of "serious personal misconduct". The surprise announcement by Walmart followed an email from Binny, denying the allegations, and the company board confirming Flipkart CEO Kalyan Krishnamurthy's induction as the Flipkart's Group CEO.
In a statement issued by Walmart, the company said: "...Binny Bansal announced his resignation as CEO of Flipkart Group, effective immediately. 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."
However, the company did not disclose the nature of the allegations levelled against Binny Bansal. Sources told Business Today the complaint was filed in July by one of the ex-employees of Flipkart, following which an inquiry was conducted by an independent law firm at the behest of Flipkart board. But, the news of the 37-year-old Flipkart Group CEO's exit came as a surprise to everyone, including the company employees. "Can't believe that Binny can be involved in any of this, which could amount to personal misconduct," said one of the employees, who did not wish to be named.
After Walmart's statement confirming Binny's resignation, he himself wrote an email to the company employees, assuring that he will continue to serve as the board member and will also remain a large shareholder in the company.
In an emotional email, Binny Bansal said he was contemplating stepping down from his current role for a while, and that his current decision was accelerated by "certain personal events" that have taken place in the past. "Events related to a claim of serious personal misconduct made against me, which was uncorroborated after a thorough investigation completed by an independent law firm. The allegations left me stunned and I strongly deny them," he said, without even disclosing the nature of these charges.
Binny further wrote: "The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation. These have been challenging times for my family and me."
Unlike Sachin Bansal, who exited with his 5.5 per cent stake in the company, Binny said he would stay invested in Flipkart. To soothe the nerves of the employees, the company board and Flipkart CEO Kalyan Krishnamurthy reached out to them through emails, and termed Binny's exit as "unfortunate and challenging for Binny, his family and Flipkart".
The board said there will not be changes to the existing structure, and Kalyan Krishnamurthy will continue to be the CEO of Flipkart group entities. Ananth Narayanan and Sameer Nigam will continue to remain the CEOs of Myntra and Jabong, and PhonePe, respectively. They both will work under Kalyan, who will report to the company.
Kalyan Krishnamurthy assured the company employees that it will be business as usual, going forward. "Flipkart's leadership position today was possible due to the years of hard work and collaboration between all stakeholders of the e-commerce ecosystem, particularly you, whose ingenuity and dedication have led us to become the market leader in India," he said, while assuring the employees that there will be no more changes to the existing structure.