Walmart investigates Flipkart after ₹150 Cr vendor kickback claims

Walmart is examining allegations that Flipkart employees received more than ₹150 Cr ($16 Mn) in improper payments from vendors. The inquiry follows whistleblower reports involving staff in Flipkart’s smartphones and luggage and travel accessories divisions, according to Inc42, which cited unnamed sources. The complaints allege employees accepted money or benefits in return for advantages on the platform, such as higher visibility for certain sellers’ products.

Reports suggest some arrangements may have involved Flipkart’s B2B operations, with employees allegedly taking cuts from vendors during transactions. The investigation is still underway, and details about the extent of the alleged misconduct remain unclear. Flipkart responded to queries by stating it has “strong governance processes” and adheres to “high standards of integrity.”

This is at least the third time in under three years Walmart has looked into financial misconduct at Flipkart. Moneycontrol reported that a previous investigation in the luggage and travel accessories division about two-and-a-half years ago led to at least three firings, while another probe in the smartphones division six months ago resulted in an employee leaving before potential dismissal. The repeated incidents may point to ongoing challenges in enforcing internal controls.

The investigation coincides with other pressures on Flipkart. Over the past year, the company has seen multiple high-level departures, including executives overseeing smartphones, product and technology, and corporate tax. These exits add to questions about stability as Flipkart works toward profitability and considers a potential public listing.

Former employees have also raised concerns about equity. More than 1,000 ex-Flipkart staff recently appealed to Walmart’s board, asking for equal treatment in stock buybacks offered to current employees. They also sought more time to exercise vested stock options and a formal channel to address their grievances. This follows earlier reports that former executives were advocating for an ESOP buyback amid uncertainty around Flipkart’s IPO plans.

Flipkart’s financial results show growth but limited progress on profitability. Flipkart Group CEO Kalyan Krishnamurthy indicated in July that the company has no set timeline for going public.

At the same time, Flipkart continues to expand into new areas. The company is reportedly preparing to launch a food delivery service by the end of October. It also operates Flipkart Minutes, a quick commerce platform competing with established players, and recently took a minority stake in B2B travel startup TravClan to strengthen its holiday offerings.

If the allegations are substantiated, they could affect trust between Flipkart and its sellers. Recent reports have also noted adjustments to pricing strategies during the festive season, which some third-party sellers have questioned.

The next steps will likely determine whether the probe leads to dismissals or broader changes at Flipkart. The outcome may influence Walmart’s decisions on further investment or IPO timing, as well as vendor confidence in the platform. For now, governance concerns, leadership turnover, and financial performance remain closely linked.

Sources: inc42.com