Past poor judgment connected to a misconduct allegation has cost another retail executive his job, and this time it was Flipkart’s cofounder and group chief executive officer Binny Bansal.
Walmart Stores Inc., which in August closed on its $16 billion investment for a 77 percent stake in India’s largest online retailer, said in a statement Tuesday that Bansal “announced his resignation as ceo of Flipkart Group, effective immediately.”
Walmart said Bansal’s decision followed an independent investigation regarding an “allegation of serious personal misconduct.” Walmart declined to elaborate on the nature of the allegation.
Walmart said that Bansal “strongly denies the allegation,” and that the company ensured that the investigation was both “deliberate and thorough.” The American firm further said that the probe did not find evidence to corroborate the complainant’s assertion. But apparently what tripped up Bansal was how he handled the situation. According to Walmart, the investigation found “other lapses in judgment, particularly a lack of transparency, related to how Binny responded to the situation. Because of this, we have accepted his decision to resign.”
According to published reports, Bansal in an e-mail to Flipkart’s employees denied the allegations. The now former ceo of the Flipkart Group noted that the investigation brought to light certain lapses in judgment and his decision to step away as chairman and group ceo was so the matter would not become a distraction for the company and the Flipkart team.
Bansal retained an interest in Flipkart following the sale of the majority stake to Walmart. At 37, he is part of the generation of wealthy tech-savvy entrepreneurs in India. Age and culture might also have played a role in the stated lapses in judgment and lack of transparency at the entrepreneurial firm.
Elaine Hughes, founder and ceo of executive search firm E.A. Hughes & Co., noted that many entrepreneurial firms are run by tech geniuses who are intellectually gifted, but still need a bit of emotional maturity when it comes to guidelines on how one conducts one’s self. “You find that many times the emotional age does not catch up to their accomplishment age. There is a disconnect in the way they conduct themselves,” she said, adding that many also are at private firms where there are no set guidelines on behavior.
Hughes said that as companies are absorbing their cross-border acquisitions, “Everyone is learning that what has been accepted [in the past] in some cultures is not accepted in other countries.”
For Walmart, shifting to a new group head is something it had already been working on. The mass discounter disclosed that Bansal had already been thinking about a “transition” and that the two were in discussions connected to putting together a succession plan. According to the U.S. retailer, that plan now has been accelerated.
At present, there’s no major change to the different Flipkart businesses. Kalyan Krishnamurthy continues as ceo of Flipkart, with the Myntra and Jabong operations continuing as separate platforms within the Flipkart business. Both Myntra and Jabong will continue under the leadership of Ananth Narayanan as ceo, reporting to Krishnamurthy. Furthermore, Sameer Nigam will continue leading PhonePe as ceo. Both Nigam and Krishnamurthy will report directly to the Flipkart’s board.
Walmart said it remains committed to investing for the long-term and is supportive of the leadership team’s desire to “evolve into a publicly traded company in the future.”
At the time Walmart announced the deal, Flipkart’s valuation was at $20.8 billion. It was seen as Walmart’s latest volley to take on Amazon, which also had bid for the company. Over the years, Flipkart had beefed up its fashion categories, a sector that has seen Walmart and Amazon also beefing up their presence.
Still, the departure of Bansal is the latest of several high-profile resignations in the industry this year. In February, Laurent Potdevin resigned as ceo from Lululemon Athletica Inc. due to a “range of incidents” that fell short of the yoga-apparel firm’s standards of conduct. And in June, allegations of sexual harassment tripped up Guess Inc. cofounder and chief creative officer Paul Marciano, who resigned as executive chairman.