Uber Investor Sues Travis Kalanick for Fraud

11 August, 2017, 00:24 | Author: Lorena Waters
  • Uber's Graves Stepping Down From Leadership Role

Benchmark Capital, a venture capital firm that was an early investor in Uber and holds a seat on the board, has sued Travis Kalanick, Uber's founder and recently-ousted CEO.

In a lawsuit filed in DE on Thursday, the San Francisco-based venture capital firm, which holds an Uber board seat, accused Kalanick, the company's co-founder, of engaging in a power play to get himself reinstated as CEO.

That would kill Kalanick's seat on the board and most of his remaining influence.

Benchmark further says that in moving to add the three board seats past year, Kalanick "intentionally concealed and failed to disclose his gross mismanagement and other misconduct at Uber" which they say included "pervasive gender discrimination and sexual harassment".

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Kalanick "understood that these matters, once revealed, would likely force him to resign", says the suit, first reported by Axios.

In its lawsuit, Benchmark argued that Kalanick was aware of these problems when Uber's board in 2016 agreed to expand the number of voting directors from eight to 11, with Kalanick having the sole right to designate those seats.

Benchmark now says they never would have allowed the expansion if they'd known about widespread allegations of sexual harassment within the company, and the pending conflict with Alphabet subsidiary Waymo over the alleged theft of trade secrets related to self-driving cars. It's the latest sign that, despite Kalanick's recent resignation from Uber, the company continues to find itself immeshed in Kalanick-related chaos. Benchmark now apparently sees that Kalanick could have a path back into power at the company using those two vacant seats - he must have three other guaranteed votes on the existing board - so Benchmarks wants the court to invalidate the vote to add those seats altogether.

"In 2016, Kalanick fraudulently obtained control of three newly created seats on Uber's Board by his material misstatements and fraudulent concealment from Benchmark of material information that would have led Benchmark to reject the creation of the seats", Benchmark Capital wrote it its complaint. Uber has fired at least 20 employees as a result of that investigation.

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