Flipkart just refuses to go away from the news. Former founder Binny Bansal’s sudden exit from Flipkart as chairman and group CEO after allegations of ‘serious personal misconduct’ charges against him, could predict changes for not just for Flipkart but for the entire startup ecosystem of India.
While most Flipkart employees have expressed shock about the abruptness of the incident, Flipkart CEO Kalyan Krishnamurthy tried to reassure employees through an email. “I wanted to personally let you know that there will be no changes in our operating processes, or to the mission of the company as a result of this news,” it said.
Several employees cannot help feeling that this incident changes the way Flipkart runs forever, because it now becomes officially an investors’ company. According to industry experts, the incident could spell wide-ranging consequences for the startup culture in India, a country where the #MeToo movement is already making quite a stir. According to a TOI report, many startup founders have said that they have discussed the need for tighter governance and fuller and timely disclosures with their cofounders and mentors.
Leaders are feeling insecure and sensitive about the equation between founders and senior executives at startups and female colleagues. Akin to its global counterparts, the Indian startup ecosystem too is male dominated. Shreya Mishra, co-founder of Flyrobe, told ETRetail, “We should look at how many women have gone through these issues. And it’s about time we take corrective measures, at the cost of some feeling uneasy about that casual joke, if need be.”
While Bansal’s exit was apparently imminent, since he was already planning to transition out of the company, many are seeing the incident as his hand being forced. His statement, as reported by ETRetail, says, “For some time, I have been mulling over the right time to step away from an operating role at Flipkart Group. My plan was to continue in my current role for a few more quarters to continue the transition after closing the deal with Walmart. However, my decision to step down has been accelerated by certain personal events that have taken place in the recent past.”
A report also said that following the acquisition, Walmart had been thinking about finding a suitable replacement for Bansal for a few months now, considering his involvement in daily operations of the company was minimal. While admitting to Walmart’s admonition about ‘lapses in judgement’ and ‘lack of transparency’ on his part, Bansal has also stated that his place as member of the board and equity shareholder will continue.
Walmart Most Likely to Win Over Flipkart with 75% Stake
In fact, non-disclosure of the incident at the time of the acquisition seems to be the mistake that has come back to haunt Bansal now. Non-disclosure is taken very seriously by global companies. Still, the incident seems to have rendered past predictions true that Walmart will eventually go ahead without the original founders. It looks like the incident has given the retail giant the needed leverage.
ETRetail quoted a former Flipkart executive, “Sachin was the more feisty among the two founders, while an amiable Binny was expected to ensure continuity. Now Binny’s exit under tightly-scripted secrecy clauses, even as he retains board seat and shares, strengthens belief that Walmart was interested in life beyond Bansals.”
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