Uber investor brings fraud charges against Travis Kalanick
11 August 2017
After being forced to give up his position as chief executive, by unhappy investors, Travis Kalanick is now facing charges of fraud and other transgressions, by an investor, in a bid to remove him from Uber's board of directors.
Benchmark, a Silicon Valley venture capital firm and among Uber's largest shareholders, filed suit against Kalanick yesterday in Delaware Chancery Court. Kalanick has been accused of fraud, breach of contract and breach of fiduciary duty.
At the heart of the suit is how Kalanick obtained outsize control of several Uber board seats in 2016, which, according to Benchmark, he achieved through ''material misstatements and fraudulent concealment'' of information. Kalanick's ''overarching objective was 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 suit said.
The suit states that Kalanik's position at the company's board ''is thus improper and inequitable, and should be invalidated.''
According to commentators, the move indicated a new low of power politicking, as regards the fate of Uber, valued at nearly $70 billion.
The case came as a surprise to many technology investors, who deemed it ''the nuclear option'' for a venture firm. At the $68-billion valuation achieved by Uber last year, Benchmark's stake would be worth almost $9 billion, according to commentators.
Bill Gurley, the venture capitalist who led Benchmark's investment into Uber, was, at one time, Kalanick's closest confidants. He resigned from Uber's board in June after he grew increasingly unhappy with Kalanick's behaviour, according to sources close to the situation.
According to commentators, the lawsuit filed yesterday in a Delaware court opened another chapter in a saga of woe at Uber that has put the future of the world's most highly-valued startup company in doubt.