Flipkart co-founder, CEO Binny Bansal steps down
Flipkart co-founder Binny Bansal has announced his resignation as the CEO of the group, effective immediately. The decision came to light after Flipkart and Walmart released a statement informing the same.
Flipkart co-founder Binny Bansal on November 13, 2018 announced his resignation as the CEO of the group, effective immediately.
The decision came to light after Flipkart and Walmart released a statement informing the same. The statement read, "Earlier today, 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.”
The statement further read that Bansal’s decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct. Though he strongly denies the allegation, nevertheless, the companies shared that they 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, both Flipkart and Walmart accepted his decision to resign.
The statement also read that Binny had been contemplating a transition for some time and that they had been working together on a succession plan, which has now been accelerated.
What happens now?
Kalyan Krishnamurthy will continue to be the CEO of Flipkart that now includes Myntra and Jabong, which will continue to operate as separate platforms within the Flipkart business.
Further, Ananth Narayanan will continue to be the CEO of Myntra and Jabong and will report directly to Kalyan.
Sameer Nigam will also continue to be the CEO of PhonePe. Both Kalyan and Sameer will report directly into the board.
As far as Bansal’s board seat is concerned, it is not clear if he will hold on to it post stepping down.
• Bansal’s decision to step down from Flipkart comes less than six months after the news of American retailer Walmart acquiring Flipkart broke in the nation.
• At the point of sale, Binny had stayed while Flipkart’s other co-founder Sachin Bansal had decided to leave the company.
• Both the Bansals had held 5.5 per cent stake each in Flipkart. As a part of Walmart’s condition that it could accommodate only one of the Flipkart founders in the board, Sachin Bansal had resigned, selling his 5.5 per cent stake for a little over Rs 6,700 crore (about $1 billion).
• Binny Bansal, on the other hand, had retained his 5.5 per cent stake in the company and remained as the Group’s CEO.
• Binny and Sachin, both IIT graduates had founded India's largest e-commerce platform Flipkart as an online bookstore in 2007 from an apartment in Bangalore with 4, 00,000 rupees cash.
• Though they share the same surname, the two are not related.
• Before Flipkart, both Sachin and Binny worked with Amazon India as software engineers but they decided to leave within a short span of time to start something of their own.
• Though initially, they thought of starting a comparison search engine but they realised that the market for e-commerce in India was very small.
About Flipkart’s Acquisition
• Walmart, one of the world’s largest multinational retailers acquired Indian e-commerce platform Flipkart in a $16 billion deal on May 9, 2018.
• The US-based company bought 77 per cent stake in Flipkart from the existing shareholders including Japan’s Softbank Group.
• The deal is the biggest merger and acquisition in India so far and marks the entry of Walmart into the Indian retail business.
• With 77 per cent stakes, Walmart has the controlling rights in Flipkart.