Walmart is looking to separate the responsibilities of chairman and group CEO
Walmart holds the rights to appoint a new Flipkart CEO or chief financial officer, in the event of a vacancy
Flipkart CEO Kalyan Krishnamurthy is one of the candidates likely to become group CEO
Whenever Flipkart has gone through leadership changes, the company has taken another step at success. Seems the global retailer Walmart is expecting the same. Post receiving the CCI approval for the acquisition, Walmart is reportedly considering naming a new chief executive at the group level.
At present, Flipkart co-founder Binny Bansal is the Group CEO while Kalyan Krishnamurthy holds the Flipkart CEO position. According to media speculations, Krishnamurthy is the first choice as a Group CEO for Walmart now.
Krishnamurthy was first appointed as Flipkart CEO in January 2017 when Binny Bansal stepped down from his position. At the same time, Binny Bansal took up the responsibilities as Group CEO of Flipkart. Prior to that, Flipkart CEO Sachin Bansal steps down and was replaced by co-founder Binny Bansal
To be noted, Walmart holds the rights to appoint a new Flipkart CEO or chief financial officer, in the event of a vacancy, in accordance with the company regulatory filings.
The move is in line with global retailer’s plans to separate the responsibilities of chairman and group CEO and therefore may look at both internal and external candidates for the group CEO role.
It is further suggested that Flipkart may decide to name a new group CEO, partly because co-founder and current group CEO Binny Bansal is not actively involved in daily operations. He will, however, remain the chairman of the company.
However, these discussions are still at a nascent stage and not yet entirely finalised. A Flipkart spokesperson said the company does not comment on “speculations and rumours”.
If, and when, Bansal leaves, he has to follow a stringent non-compete clause that will prevent him from working with any competitor of Flipkart’s group companies for 18 months from the date of his departure or from the date his shareholding in Flipkart falls below 2%.
The development comes soon after Walmart moved several of its leaders to senior positions at the group level at Flipkart. Walmart appointed a new chief financial officer, general counsel, chief ethics and compliance officer and group controller.
In August 2018, Walmart had announced that it had acquired 77% of Flipkart for $16 Bn, valuing the homegrown ecommerce unicorn at $22 Bn which is reportedly one of the largest ecommerce acquisition deals in the world. Post-acquisition of the retail giant has also stated that Flipkart’s existing management team will continue to lead the business.
As the new parent-subsidiary combination, global retailer Walmart and Indian ecommerce giant Flipkart have been gearing up to challenge Amazon, one of the biggest war is expected during the upcoming festive season. While challenging global player Amazon with major market share and playing one of the biggest acquisitions in Indian ecommerce, Flipkart has created one of the most successful stories in India.
However, the sudden exit of Sachin Bansal (he bid adieu to the Flipkart team after 11+ years) from the company and now, speculations around the removal of Binny Bansal from a key leadership position, cannot be ignored. Not to mention, that both these co-founders have been an active supporter of the local lobby group in India to support the rights of startup founders against the foreign investors.
Walmart has been chanting the mantra of supporting the local small retailers and kirana stores and being an asset to the Indian ecommerce ecosystem as a whole. But the way, Walmart is smoothly placing its own people in the company, it forces us to question, “What is cooking behind the Walmart desk?”
[The development was reported by Livemint.]
