Walmart has initiated an internal investigation into alleged financial irregularities at Flipkart after whistleblower complaints accused employees in its smartphones and luggage and travel accessories (LTA) divisions of accepting kickbacks exceeding Rs 150 crore, according to a Moneycontrol report.
The investigation is examining whether employees received payments or favours from vendors in exchange for preferential treatment on Flipkart’s platform. The alleged misconduct is understood to have involved the company’s business-to-business (B2B) operations, through which vendors reportedly secured better visibility and other commercial advantages.
Reportedly, some employees allegedly received a share of payments from vendors handling mobile phone transactions between businesses. In return, sellers were reportedly given preferential treatment that helped improve their visibility and sales on the platform. The exact amount involved and the extent of the alleged misconduct are yet to be established.
The latest probe is reportedly the third internal investigation initiated by Walmart into financial wrongdoing at Flipkart in less than three years. An earlier investigation, conducted around two-and-a-half years ago, examined alleged irregularities in the LTA division and reportedly resulted in the termination of at least three employees. Another investigation into the smartphones division was initiated around six months ago, with one employee reportedly resigning before disciplinary action could be taken.
Walmart owns more than 80 per cent of Flipkart. The allegations are significant for the US-listed retailer, which is subject to regulatory requirements under the US Securities and Exchange Commission (SEC).
The investigation comes at a time when Flipkart is also dealing with senior management exits and employee concerns over the liquidity of employee stock ownership plans (ESOPs). The company’s IPO timeline remains undecided, with uncertainty around a potential listing reportedly affecting employee expectations of liquidity from their stock options.
At least 14 vice-presidents and senior vice-presidents have reportedly left Flipkart over the past year. Separately, more than 1,000 former employees have approached Walmart’s board seeking equal treatment with current employees in the event of a stock buyback.
Walmart and Flipkart did not respond to Moneycontrol’s requests for comment on the investigation.