Walmart has launched a fresh investigation into alleged financial irregularities at Flipkart after whistleblower complaints reportedly flagged kickbacks exceeding ₹150 crore ($16 million) involving employees in its smartphones and luggage and travel accessories (LTA) businesses. The investigation has brought the e-commerce company’s vendor management practices, internal controls and employee accountability under renewed scrutiny.
The allegations reportedly involve Flipkart employees accepting payments and other benefits from vendors in exchange for preferential treatment on the company’s marketplace. The investigation is expected to establish the individuals involved, the transactions in question and the extent of the suspected misconduct.
The probe comes at a time when Flipkart is navigating questions around its corporate governance, profitability and proposed initial public offering (IPO).
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Flipkart’s Smartphone And LTA Businesses Under Investigation
The latest investigation is examining transactions conducted through Flipkart’s business-to-business (B2B) operations, where employees allegedly helped selected vendors secure commercial advantages in exchange for financial benefits.
In the smartphones business, the suspected irregularities reportedly involved payments associated with the transfer of mobile devices between businesses. Certain vendors allegedly received preferential treatment on Flipkart’s platform, including improved marketplace visibility, potentially giving them an advantage over competing sellers.
The complaints also cover the company’s luggage and travel accessories division. Employees in this category are suspected of accepting payments or other favours from vendors in return for favourable business arrangements.
While the reported kickbacks exceed ₹150 crore, the precise financial impact and the extent of employee involvement remain unclear. Walmart’s investigation is expected to examine the transactions and determine whether internal policies or compliance requirements were violated.
Two Earlier Investigations Had Flagged Similar Issues
The latest probe is not the first time Flipkart has faced allegations of employee misconduct involving its vendor relationships.
According to reports, the company conducted two earlier internal investigations into suspected irregularities across the same business categories over the past two-and-a-half years.
The first investigation focused on Flipkart’s LTA division and reportedly resulted in at least three employees being terminated. A separate probe into alleged irregularities in the smartphones business began approximately six months ago. One employee was reportedly identified as responsible for the suspected misconduct and resigned before termination proceedings could be completed.
The recurrence of allegations involving the smartphones and LTA businesses raises questions about whether existing internal controls have been sufficient to prevent conflicts of interest and improper vendor arrangements.
Walmart is expected to evaluate the findings of the latest investigation before determining whether additional disciplinary action or changes to Flipkart’s compliance procedures are necessary.
Walmart’s Oversight And Flipkart’s Governance Under Spotlight
Flipkart operates through several business channels, including its consumer-facing marketplace, Flipkart Wholesale and B2B operations that serve marketplace sellers.
The latest allegations highlight potential vulnerabilities in how commercial relationships are managed across these operations. If established, the suspected misconduct could lead to closer monitoring of vendor selection, marketplace visibility, pricing arrangements and employee involvement in business transactions.
The reported ₹150 crore figure is relatively small compared with Flipkart’s reported FY26 revenue of more than ₹1.46 lakh crore. However, the larger concern involves the effectiveness of the company’s governance and internal monitoring systems.
Walmart, which owns more than 80% of Flipkart, has a significant interest in ensuring that its Indian e-commerce business maintains appropriate compliance and financial controls.
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IPO Plans Face Another Governance Challenge
The investigation also comes amid uncertainty surrounding Flipkart’s proposed IPO, alongside senior leadership departures and concerns among former employees over liquidity from their stock options.
Earlier reports indicated that Walmart continues to prioritise improving Flipkart’s profitability as it evaluates the company’s listing timeline. At least 14 vice presidents and senior vice presidents reportedly left the organisation over the past year.
Additionally, more than 1,000 former employees approached Walmart’s board seeking comparable treatment in a potential stock buyback, highlighting continuing concerns over employee stock ownership and liquidity.
The latest investigation adds another challenge to Flipkart’s efforts to strengthen its business ahead of a potential public listing. Beyond the financial allegations, its findings could influence how investors assess the company’s internal controls, vendor relationships and corporate governance.
For now, the investigation remains ongoing, and the allegations have not been conclusively established. Its outcome will determine whether Flipkart needs to introduce stronger compliance measures, restructure vendor oversight or take further action against employees involved in the suspected irregularities.
