Former Uber CEO sued by early investor for fraud

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Venture capital firm Benchmark Capital is suing former Uber Chief Executive Officer Travis Kalanick to force him off the board of the ride services company and rescind his ability to fill three board seats Thursday.

According to the lawsuit, Kalanick is accused of concealing a range of misdeeds from the board and scheming to retain power at the company even after he was forced to resign as chief executive of Uber in June following a series of scandals.

Benchmark's lawsuit marks a rare instance of a Silicon Valley investor suing a central figure at one of its own start-ups. The well-regarded venture firm was an early investor in Uber and said in the lawsuit that it owns 13 percent of Uber and controls 20 percent of the voting power.

Uber co-founder Travis Kalanick stepped down in June after a series of scandals swarmed around him. /Reuters Photo

Kalanick issued a statement calling the lawsuit "completely without merit and riddled with lies and false allegations." The statement accused Benchmark of "acting in its own best interests contrary to the interests of Uber" and denounced the legal action as a "transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder."

The litigation in Delaware court opens another chapter in a saga of woe at Uber that has cast doubt on the future of the world's most highly valued startup company, worth 68 billion US dollars.

Uber is currently seeking a CEO and a number of other senior executives. Uber co-founder and chairman Garret Camp wrote a letter to employees earlier this week stating that "Travis is not returning as CEO," following reports that Kalanick was hoping to reclaim the top job.

Benchmark said Kalanick was trying to achieve that by attempting to "pack the board."

People walking outside Uber offices /Reuters Photo

In 2016, Uber's board agreed to expand the number of voting directors from eight to 11, with Kalanick having the sole right to designate those seats.

Benchmark, which holds one of the seats on the Uber board, said that it never would have given Kalanick the three extra seats if it had known about his "gross mismanagement and other misconduct at Uber," the lawsuit said. Kalanick appointed himself to one of the seats after he was ousted as CEO, and the other two remain vacant.

Uber's troubles include a trade-secret lawsuit by Alphabet Inc's Waymo unit that led to the departure of a star engineer and hobbled Uber's self-driving car program; sexual harassment allegations that led to a major internal investigation and the dismissal of several top executives; and alleged misconduct by Kalanick and other executives in handling a rape committed by an Uber driver in India.

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Source(s): AFP ,Reuters