Two issues relating to a major real estate deal and an acquisition may trouble its new owner, Walmart, as the promoters had not disclosed how these deals were structured
After co-founder Binny Bansal's hasty exit from Flipkart due to allegations of sexual misconduct, sources told The Hindu Business Line that two issues relating to a major real estate deal and an acquisition may trouble its new owner, Walmart, as the promoters had not disclosed how these deals were structured.
"There is a certain lack of transparency in some of these deals. But what is more important is whether Walmart would want to institute an investigation and if necessary, make a disclosures at all," a source told the paper.
The real estate case possibly deals with taking office space on lease from a real estate company. The source told the paper it may not have been above board completely and pointed at the possibility of fraud. There are some doubts whether due diligence was conducted before taking on the lease, the report said.
Whether the company management conducted investigations regarding these two issues when they propped up is still unknown.
Two employees of Flipkart had quit and launched their own start-up. Six months later, Flipkart acquired the start-up and retained all employees of the entity. There is speculation that in this acquisition the start-up may have been overvalued, the report stated.
Walmart has been vocal in its disapproval of Flipkart co-founders' non-disclosure. The US retail giant launched an investigation into Binny Bansal to corroborate a complaint against him.
"While the investigation did not find evidence for the particular complaint, it did reveal other lapses in judgement, particularly a lack of transparency, related to how Binny (Bansal) responded to the situation," the company said in a statement.After Binny Bansal’s exit, the top and middle management have been shuffled. One main appointment after the co-founder's exit on November 13 was that of Chief Human Resources Officer, a post which was vacant in the company for a while.