The timing and the manner of the exit of Binny Bansal, co-founder and group CEO, Flipkart leaves a trail of questions. Walmart’s investigation into Bansal that led to his resignation on Tuesday stemmed from an allegation of sexual assault that dates back a few years, a person familiar with the matter told Reuters.
Firstpost spoke with people who had worked closely with Bansal as former employees of Flipkart; startup firms where he has invested in his personal capacity and some who have known him for over five years.
The timing of the letter from Walmart and Bansal’s resignation is a bit too ‘strange’, some of them pointed out. The Big Billion Days are over and now seems the perfect moment to throw out the co-founder, a startup founder said.
“I worked for a short stint at Flipkart which was many years after the alleged incident. I wasn’t aware of it and I doubt if any persons were privy to it. In my interactions with Binny Bansal, I found him very focussed, a man of few words and very success-driven,” said a former senior executive of Flipkart who was ‘distressed’ to hear of the allegation.
It is puzzling that Walmart chose to let Bansal remain the CEO and carry out his duties when it was carrying out investigations, as mentioned by the Reuters report. Would it not have been proper to ask Bansal to step aside until the investigations were over?
Interestingly, Walmart has not specified the details of the complaint against Bansal. “While the investigation did not find evidence to corroborate the complainant’s assertions against Binny, it did reveal other lapses in judgment, particularly a lack of transparency, related to how Binny responded to the situation,” Walmart said in a statement.
K Ganesh, investor and entrepreneur, says in the case merger and acquisition deals, it is quite normal for founders to move on and acquirers to align with their own strategy. Unlike earlier times when Flipkart was the Bansals’ sole turf, post-Walmart acquisition, the e-commerce giant’s strategy would not be decided by investors and valuation, he pointed out. “For sure, Binny Bansal would have anyways moved on from Walmart after some time. Simply because Walmart would want to run the firm with global talent,” he said.
He refused to comment on Bansal’s resignation on allegations of ‘serious personal misconduct’. “There is no official word on that about what that is and I won’t speculate,” he said. However, he said the company would not be impacted by Bansal’s resignation. “Walmart Flipkart is a large company. Bansal’s resignation will have no impact on Flipkart or Walmart,” he said.
Investors chose to look at the ‘sexual allegation’ as ‘purely speculative’, as they wondered what could stop the American retail giant from stating that in the wake of Bansal’s resignation. They wondered if Walmart was being opportunistic by keeping Bansal at the helm till Big Billion Days were over and then make this announcement. “When Sachin Bansal left, it spawned a lot of negative press for Walmart. Perhaps, the American retail giant did not want the same and waited it out for some time before making this announcement,” an investor said.
“In late July… an allegation came to us. It was a claim of sexual assault against Binny,” the source said, adding the individual concerned was a former Flipkart associate who was not with the company at the time of making the allegation.
A startup analyst felt that the ‘personal misconduct’ charge that Walmart has mentioned in its release may relate to Bansal having shared some information about Flipkart post-Walmart’s acquisition with friends that would be considered ‘conflict of interest’. “That would be a ’lack of judgment’”, the individual said.
A startup founder in whose firm Binny Bansal has invested in his personal capacity was ‘shocked by the accusation’ of sexual misconduct as reported in a section of the press. “Unless it is clarified by Walmart, how does one believe these accusations,” the founder said. “I have known Binny for over five years. He is a man of few words, an introvert. He is solely driven by his commitment to work. This accusation as reported in the press is very painful to believe,’ the individual said.
Walmart would not shy from saying ‘sexual misconduct’ if that was the case, said some. “What is there to be defensive about saying it?,” said a startup analyst. The American giant would follow international practices and see the matter through. If, as some news reports said that the complaint against Bansal was brought to Walmart’s notice some months ago, should they not have asked Bansal to step aside and conduct investigations? Why would they keep him as the chairman for so long, asked an investor.
“In late July… an allegation came to us. It was a claim of sexual assault against Binny,” the source said, adding the individual concerned was a former Flipkart associate who was not with the company at the time of making the allegation.
“The investigation could not corroborate the allegation. It did, however, bring to the surface a lack of transparency on Binny’s part.” Bansal has strongly denied the allegation, according to a separate statement by Flipkart and its main shareholder Walmart, Reuters reported.
Besides denying the allegation, Bansal has said in a mail to employees: “I will continue to be a large shareholder in the company and will continue to serve as a member of the Board of Directors.”
Although some media reports have mentioned the resignation is related to a complaint from a former female colleague, neither Walmart nor Binny Bansal has alluded to the allegation in the letters released to the media on Bansal’s resignation. Media reports also mention it was a consensual affair .
Walmart did not detail the nature of the allegations. “This has been an unfortunate and challenging situation for Binny, his family and Flipkart,” the e-commerce provider said in a separate internal note.
Flipkart responded to a text message on questions on alleged sexual misconduct on part of Binny Bansal with the press statement that Walmart issued on Tuesday evening after Bansal’s resignation.
Text messages were sent to Sachin Bansal, co-founder, Flipkart, on the allegations against Bansal, but he did not respond.
Sources at Flipkart said that the incident referred to in 2016 wasn’t virtually unknown to many in the company. “The company was then completely under the control of the Bansals and any such incidents would have been brushed under the carpet,” said a former employee, requesting anonymity. The employee also said that such incidents a few years ago would not have been taken seriously and has now surfaced in the times of the #MeToo movement across the country.