According to the report, some Flipkart employees allegedly accepted payments and favours from brands in exchange for giving them preferential treatment on the platform.The exact amount involved and the extent of the alleged wrongdoing are still being investigated, the report mentioned.Walmart has launched an investigation into alleged financial wrongdoing at Flipkart after whistleblower complaints accused employees of accepting kickbacks worth more than Rs 150 crore, according to a Moneycontrol report.The alleged payments involve employees in Flipkart's smartphones and luggage and travel accessories (LTA) divisions. The investigation is looking into how the money was received and the nature of the alleged wrongdoing, the report mentioned, citing four people familiar with the developments.Walmart, which owns more than 80% of Flipkart, is yet to comment on the matter.It must be mentioned that a kickback refers to an illegal payment or benefit given in return for preferential treatment or an improper favour.
Such payments are considered a form of corruption or bribery as they can influence an employee's or public official's decisions and prevent them from acting fairly. WHAT ARE THE ALLEGATIONS AGAINST FLIPKART EMPLOYEES?According to the report, some Flipkart employees allegedly accepted payments and favours from brands in exchange for giving them preferential treatment on the platform.The alleged wrongdoing largely involved Flipkart's business-to-business (B2B) operations.
Employees reportedly took cuts from vendors of certain mobile phone brands when devices were being transferred from one business to another. In return, these employees allegedly ensured that the sellers received preferential treatment, including better visibility on Flipkart.
This helped the vendors generate higher sales on the platform, cited the report.Flipkart runs its B2B operations through two main channels: Flipkart Wholesale, which caters to local retailers, kirana stores and small businesses, and its B2B Sales Programme for marketplace sellers. These operations are separate from its consumer marketplace business.The exact amount involved and the extent of the alleged wrongdoing are still being investigated.
Walmart is expected to decide on further action once the probe is complete, a source told, cited the report.THIRD WALMART INVESTIGATION IN LESS THAN THREE YEARSThis is reportedly the third investigation into financial wrongdoing at Flipkart by Walmart in less than three years.Around two-and-a-half years ago, Walmart investigated alleged financial irregularities in Flipkart's LTA division. At least three employees were terminated following that investigation, the report mentioned.Another investigation was conducted in the smartphones division around six months ago.
In that case, one employee was reportedly found guilty of the allegations and resigned before the company could terminate their employment.The details of these two earlier investigations had not been reported previously.The latest development is significant as Walmart is listed in the US and is subject to strict regulatory requirements, including those set by the Securities and Exchange Commission (SEC).The investigation comes at a time when Flipkart is also dealing with senior-level exits, employee dissatisfaction over stock options and uncertainty about its proposed initial public offering (IPO).Walmart has not yet decided when it plans to take Flipkart public, it was earlier reported.The delay has reportedly left several current and former employees unhappy, particularly over the lack of clarity on when they will be able to convert their employee stock ownership plans (ESOPs) into cash.At least 14 vice presidents (VPs) and senior vice presidents (SVPs) have left Flipkart over the past year, according to people familiar with the developments cited in an earlier report.In another development, at least 1,000 former Flipkart employees reportedly wrote to the Walmart board a few weeks ago, seeking equal treatment with current employees in the event of a stock buyback.The latest investigation adds to the challenges facing Flipkart as it deals with questions around internal processes, employee exits and its IPO plans.- Ends