Co-founder Binny Bansal’s transgression may not be the only case that has come to the surface as two other issues concerning a major real estate deal and an acquisition could eventually come to haunt Walmart, the new owners of e-commerce major Flipkart.

Sources inside Flipkart said that the promoters of the company may not have disclosed how these deals were structured. “There is a certain amount of lack of transparency in some of these deals. But what is more important is whether Walmart would want to institute an investigation and if it is necessary to make any disclosures at all,” the source who did not want to be named, said.

One of the cases relates to taking office space on lease from a real estate company. “The deal may not have entirely been above board and there are doubts over whether adequate due diligence was carried out before taking on the lease,” the source said.

The source was pointing at the possibility of a fraud having been committed from the leasing of the office space. Another source said partial due diligence was done but whether it conforms to internationally-known practices is still a question mark.

It is still not known whether the Flipkart management got down to carrying out an investigation once certain allegations concerning these two cases came to the surface.

Start-up overvalued?

With respect to an acquisition, the co-founders of the acquired firm were employees of Flipkart who resigned from the company and launched a startup. Six months later, the e-commerce major acquired them, with all the employees of that venture.

One of the co-founders of the startup continued to head the venture after the acquisition. “There may have been some issues regarding the over-valuation of that startup, which were glossed over,” the source said.

Walmart has come down heavily on the issue of non-disclosures by the founders and one of them, Binny Bansal, had to immediately resign after it was found that he did not respond to the situation properly. In a statement released on November 13, both Flipkart and Walmart said that an investigation carried out to corroborate a complainant’s assertions against Bansal did not find any evidence.

“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,” the statement said.

Both the companies made it clear that they had a responsibility to ensure the investigation was “deliberate and thorough”, which could give an indication of how they will henceforth act in case of newer allegations coming to light.

Meanwhile, several changes in the middle and at the top are expected to be made to make a clean break from those closely associated with the founders. One of the decisions made soon after Bansal’s exit was the appointment of the chief human resources officer, a post lying vacant for quite some time now. This appointment was necessary as Flipkart wants to fill up several vacant posts as well as replace those who have quit recently. The post of HR head was being handled by CEO Kalyan Krishnamurthy in the interim.

Sources also said that apart from streamlining the operations of Flipkart, an exercise to rightsize the company could also take place soon. This could result in Flipkart becoming leaner and less hierarchical.

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