MUMBAI (Reuters Breakingviews) - Bidding farewell to a founder can be helpful sometimes. And so it may be for Walmart .

Binny Bansal is decamping from Flipkart, the Indian e-commerce firm he co-founded and was running. His exit amid a misconduct scandal comes just a few months after the U.S. mega-retailer paid $16 billion for control. It is a blemish on Walmart’s due diligence of its biggest acquisition, but Flipkart’s management has been tumultuous.

A high-profile exit so quickly in this manner looks unseemly. Walmart says the probe into Bansal didn’t corroborate the original complaint, but revealed other lapses of judgment, which led it to accept his resignation. Bansal denies any wrongdoing. Either way, his departure follows that of Sachin Bansal, the other – unrelated – co-founder, who departed at the time the sale was announced, leaving the company without either of the former Amazon employees who built it.

The episode echoes other oversights by multinational companies that have wrestled to make big Indian acquisitions work. Booze giant Diageo, for example, discovered accounting irregularities in 2015 soon after buying a majority stake in United Spirits, and then had to pay up to cut ties with now-disgraced tycoon Vijay Mallya. Perhaps alert to similar potential problems, Walmart has been quick to install its own choices for top spots in finance, ethics and compliance at Flipkart.

A full clear-out was probably warranted, too. Since 2017, Binny Bansal has held a mostly symbolic position as chief executive of the group, which includes apparel websites Jabong and Myntra, and phone payments app PhonePe. The main online retail operation was run by Kalyan Krishnamurthy, a well-regarded former executive from a big Flipkart backer, Tiger Global. He was installed after bringing the company back from the brink. Krishnamurthy will now take control of the wider operation.

With a simpler management structure, Walmart can have a fresh start as it looks to grow Flipkart’s narrow lead in a cutthroat market over arch-rival Amazon. Even if the path to parting ways with Bansal was messier than desired, the ultimate outcome may be a blessing in disguise.

CONTEXT NEWS

- Walmart said on Nov. 13 that Binny Bansal, group chief executive of Indian e-commerce firm Flipkart, had resigned following a probe into “serious personal misconduct”.

- "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," the company said.

- Walmart added that Bansal, a Flipkart co-founder, strongly denied the allegations. The situation related to an allegation of sexual assault, Reuters reported, citing two unnamed sources.

- Kalyan Krishnamurthy, who heads the company's main Flipkart e-commerce operation, will now act as CEO for the broader group, the company said. Flipkart Group includes Flipkart, apparel websites Myntra and Jabong, and payments app PhonePe.

- In May, Walmart agreed to pay $16 billion for a roughly 77 percent stake in Flipkart. The deal closed on Aug. 18.

- Bansal's departure follows that of co-founder and former Amazon colleague Sachin Bansal, who left at the time of the sale.

- Walmart said Binny Bansal had been contemplating a transition for some time and that the companies had been working together on a succession plan, which had now been accelerated.

(Editing by Jeffrey Goldfarb and Katrina Hamlin)

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