Published: Sat, August 12, 2017
Markets | By Noel Gibbs

Early Uber Investor Sues Former CEO Travis Kalanick for Fraud

Early Uber Investor Sues Former CEO Travis Kalanick for Fraud

A group of Uber shareholders is revolting against Benchmark Capital, the ride-sharing app's biggest investor, which filed a surprise lawsuit on Thursday that seeks to oust former CEO Travis Kalanick from the ride-sharing app's board.

In the lawsuit, Benchmark claims Kalanick concealed material information from investors when he created three new board seats in 2016 and gave himself the right to appoint people to those seats. Benchmark's dismay with Kalanick stems from the former CEO's alleged machinations of Uber's board that were guaranteed to keep him in influence despite resigning as CEO. It's also asking the court to suspend any board-level voting, such as hiring a new CEO, until the court rules on the status of the three additional board seats.

'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, ' the statement said.

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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.

The transportation service company that is listed in the Securities Exchange Commission (SEC) as Uber Technologies, indeed in the midst of weathering major challenges from without and within. The venture capital firm says that would harm Uber's shareholders, employees, drivers and customers.

Sources close of Uber scandals indicated that Bill Gurley, who led Benchmark Capital into Uber had resigned from the board due to a growing concern about Kalanick's behavior. Benchmark has used false allegations from lawsuits like Waymo as a matter of fact and this and many actions has crossed the fiduciary line. Waymo sued Uber earlier this year. He also agreed to relinquish control of the other two new seats, but Benchmark alleges that he's not yet signed the document that would make that official.

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Benchmark claims that Kalanick is attempting to fill Uber's board with "loyal allies" to help him return to his former position.

"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. To this end, at this point, in light of your suit against the Company, we believe it would be best, and hereby request, that Benchmark remove its representative from the Company's Board and move promptly to divest itself of enough shares in the Company so as to cease to have Board appointment rights.

The letter was first published on Twitter by Axios and by Mike Isaac of The New York Times. The investor indicated that some of the top CEOs are scared to take up the job.

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