Walmart's Flipkart CEO Steps Down in Wake of Misconduct Allegation -- 2nd Update
November 13 2018 - 12:19PM
Dow Jones News
By Newley Purnell and Kimberly Chin
Walmart Inc. said the chief executive of Flipkart Group, its
Indian e-commerce business, has resigned following an independent
investigation into personal misconduct allegations.
Binny Bansal, one of the co-founders of Bangalore-based
Flipkart, decided to step down after "recent events risked becoming
a distraction, " Walmart said Tuesday.
While the investigation didn't find evidence to corroborate
complaints against him, it revealed other "lapses in judgment," and
a "lack of transparency" in how Mr. Bansal responded to the
situation, the company said.
Mr. Bansal has strongly denied the allegations against him,
Walmart said.
The company said Mr. Bansal had already been contemplating
leaving the role and was working with the company on a succession
plan. Walmart didn't elaborate on the allegations in its
statement.
"These events relate to a claim of serious personal misconduct
made against me, which was uncorroborated after a thorough
investigation completed by an independent law firm," Mr. Bansal
said in email sent to staff that was provided by a spokesman for
Walmart and Flipkart. "The allegations left me stunned and I
strongly deny them."
Mr. Bansal didn't respond to the Journal's request for
comment.
Kalyan Krishnamurthy, who has led the Flipkart unit since 2017,
will now oversee the company's two online fashion retailers Myntra
and Jabong. Ananth Narayanan, who is the CEO of Myntra and Jabong,
will report to him.
Walmart purchased a 77% stake in Flipkart for $16 billion
earlier this year, its largest-ever acquisition, making the company
a cornerstone of Walmart's plans to remake its international
portfolio. After the deal, Judith McKenna, chief executive of
Walmart International, hailed Flipkart's top brass. "It's got
scale, it's got growth, but it's also got a great management team,"
she said of the startup.
Online retail in India is growing quickly as inexpensive
smartphones and cheap mobile data plans proliferate and shoppers
become more comfortable paying online. Online retail in India was
worth about $20 billion last year but is expected to rise to $35
billion by 2019, according to research firm Forrester.
Amazon.com Inc. founder Jeff Bezos has pledged to invest $5
billion in India, and the Seattle company has made rapid gains
against Flipkart in recent years.
Mr. Bansal and Sachin Bansal, who share the same last name but
are unrelated, founded Flipkart in 2007, having both worked earlier
at Amazon Web Services in India. Like Amazon, Flipkart began by
selling books, expanding quickly over the years to sell everything
from smartphones to spices.
"This is a distraction for the company," said Satish Meena, an
analyst at Forrester. "It will take some time to digest for the
employees."
"Sachin was the person who was the visionary," said Mr. Meena.
"Binny was more of an operational guy," he said, though he said Mr.
Krishnamurthy had been running most day-to-day aspects at the firm
of late.
Corinne Abrams contributed to this article.
Write to Newley Purnell at newley.purnell @wsj.com and Kimberly
Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
November 13, 2018 12:04 ET (17:04 GMT)
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