Uber investor sues former CEO Travis Kalanick for fraud

Travis Kalanick, former CEO of Uber

One of the investors in Uber is demanding the ride-hailing firm’s former CEO, Travis Kalanick, the founder, for fraud, blaming him for trying to “increase his power over Uber for his own selfish ends”.

Venture capital company Benchmark Capital filed the case in an effort to pressure Mr Kalanick to withdraw from the board and give up his power to fill three board positions.

The investor alleged his “overarching objective is to pack Uber’s board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO—all to the detriment of Uber’s stockholders, employees, driver-partners, and customers”.

The controversy centres around a resolution decided last year to increase the number of voting directors on the board from to 11 from 8. Mr Kalanick had to power to choose those seats on that period.

However, in June, Mr Kalanick abandoned his position, following requests to do so from many of Uber’s most high-profile investors like Benchmark partner Bill Gurley among others and amid analysis that he encouraged a male-dominated sexist society. On stepping down, Mr Kalanick named himself to one of the three vacant seats.

Benchmark, in registering the claim, is looking to nullify the vote which added the additional board seats, stating Mr Kalanick got the power of the three seats by “misstatements and fraudulent concealment”, particularly of his “gross mismanagement and other misconduct at Uber”.

If the claim turned out to be successful, Mr Kalanick would not have a seat on Uber’s board.

A spokesperson for Mr Kalanick announced: “The lawsuit is completely without merit and riddled with lies and false allegations. This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders.

“Benchmark’s lawsuit is a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice regarding the management of the company he helped create. Travis will continue to act in the interests of Uber and all of its stakeholders and is confident that these entirely baseless claims will be rejected.”

Benchmark invested in Uber in 2011 and retains a 13 percent share in the car-riding company while Mr Kalanick has a 10 percent stake.

Uber refused to comment. Benchmark Capital did not directly respond to calls for explanation.