Bengaluru, India – Global retail giant Walmart is reportedly conducting an internal investigation into alleged misconduct involving employees at its Indian e-commerce subsidiary, Flipkart. The probe, sparked by whistleblower complaints, centers on accusations that employees in the smartphone and luggage and travel accessories (LTA) divisions received kickbacks amounting to over ₹150 crore (approximately $18 million USD).
Allegations of Preferential Treatment and Vendor Cuts
According to sources familiar with the matter, the allegations suggest that Flipkart employees accepted illicit favors from brands. In exchange, these brands allegedly received preferential visibility on the platform, which could significantly boost their sales. The investigation also examines claims that some employees exploited Flipkart’s business-to-business (B2B) operations, taking cuts from vendors as products moved through the supply chain.
Walmart, which holds more than 80% ownership in Flipkart, is actively working to establish the exact nature and full scope of the alleged wrongdoing. Details regarding the specific amounts involved and the individuals implicated are expected to become clearer as the investigation progresses, after which Walmart plans to take appropriate action.
Third Internal Probe in Under Three Years
This latest inquiry marks the third such investigation Walmart has initiated within Flipkart in less than three years, highlighting ongoing concerns about internal controls. Approximately two and a half years ago, a probe into financial misappropriation within the LTA department led to the termination of at least three employees. More recently, about six months ago, another investigation into the smartphones division resulted in one employee resigning before facing dismissal.
Flipkart Faces Broader Challenges
The current investigation unfolds amidst a challenging period for Flipkart. The company has experienced significant senior-level exits, with at least 14 vice presidents and senior vice presidents departing over the past year. Employee dissatisfaction regarding the liquidity of employee stock ownership plans (ESOPs) has also been reported, alongside uncertainty surrounding the timeline for Flipkart's anticipated initial public offering (IPO).
The alleged financial irregularities, despite Flipkart reporting revenues exceeding ₹1.46 lakh crore (approximately $17.5 billion USD) in FY26, raise questions about the robustness of the company's internal controls and operational processes.