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Uber investor sues former CEO Kalanick for fraud
12 August 2017, 09:34 | Kelvin Horton
Battles among Uber stakeholders have spilled into public view and the conflicts risk paralyzing the ride-hailing company at a crucial time
A group of Uber investors has now come to the defense of ousted CEO Travis Kalanick after one of its largest investors, Benchmark, sued the former CEO for allegedly rigging the company's board seats to eventually return as its CEO.
The lawsuit, which was filed on Thursday, accuses Kalanick of concealing a range of misdeeds from the board and of scheming to retain power in the firm. Kalanick resigned in June, yielding to pressure from investors seeking to clean up a toxic corporate culture at Uber.
This is a new twist to the scandals that have hit the company of late, and it is expected to make the search for a new CEO even more hard.
Benchmark sued Kalanick and Uber for many things, chiefly for fraud.
Kalanick meanwhile has vehemently denied the allegations, claiming it to be false and farther away from the truth. This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders.
While asked to comment on the statement, Benchmark Capital and Uber declined. This is expected to change the way investors deal with start-up founders in the future. Uber Technologies is valued at $68 billion with Benchmark Capital share totaling $9 billion.
Benchmark says Kalanick has acquired "a disproportionate level of influence over the board, ensuring that he would continue to have an outsized role in Uber's strategic direction even if forced to resign as CEO".
The letter's lead author Pishevar, a close friend of Kalanick, griped that Gurley filed the Thursday lawsuit "on a few hours' notice and within weeks of a personal tragedy, under threat of public scandal".
Whether someone is in Manila or some other part of the world, they may have encountered unpleasant news regarding the company that lets them ride more conveniently: Uber. Since filing the lawsuit, the tables have turned, and a group of shareholders is now asking Benchmark to remove itself from the board.
While including Uber, the company, in the lawsuit seems a mere formality, the claims stated therein will undoubtedly hurt Uber too and not just Kalanick because it details past actions performed while Kalanick was still the CEO.
Travis Kalanick may have stepped down as Uber's CEO, but he hasn't been sitting around idly since then, according to a new lawsuit. The two remaining seats are vacant.
Image credit: Uber CEO Travis Kalanick/Twitter. However, Benchmark also claims that Kalanick has reneged on his promise to make those new directors independent and diverse.
"To date, Kalanick's only response has been an email (sent on or around June 30, 2017) that he is "not ready to sign" the amended Voting Agreement", Benchmark said in the suit. Benchmark Capital, which has a board seat at Uber, first invested $11 million in the company during its Series A funding round in 2011. The investor indicated that some of the top CEOs are scared to take up the job.
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