Benchmark Capital, one of Uber’s most influential investors and largest shareholders, is suing former CEO Travis Kalanick for fraud, according to Axios. The complaint, which was filed in Delaware court, accuses Kalanick of “fraud, breach of contract and breach of fiduciary duty.” 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, which was an early investor in Uber and has a seat on its board of directors, alleges that Kalanick’s “overarching objective” is to pack the 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.”
“gross mismanagement and other misconduct at Uber”
The suit revolves around the June 2016 vote to increase the size of the board’s voting directors from eight to 11 seats, with Kalanick having the sole right to designate those seats. Benchmark says it never would have voted to allow for those extra seats had it known about Kalanick’s "gross mismanagement and other misconduct at Uber.”
According to the VC firm, this includes “pervasive gender discrimination and sexual harassment,” as well as “allegedly harbored trade secrets stolen from a competitor.” This is a reference to the ongoing lawsuit between Uber and Alphabet, the latter accusing the former of stealing its self-driving car secrets. Kalanick is also accused of hiding a tool to deceive local authorities called Greyball from the board.
This aligns with recent reports that Kalanick has been “meddling” in the search for a new CEO and is rumored to be angling to return to his former position. Benchmark is said to have spearheaded the investor push to remove Kalanick from the company after months of self-inflicted scandals thoroughly tarnished Uber’s reputation. Tensions between Uber and Benchmark have remained high, which Axios says has contributed to the slow pace in finding a new CEO.
Benchmark is seeking for the June 2016 vote to be invalidated, which would effectively eliminate the three board seats. If the firm is successful, Kalanick would be kicked off the board of directors, which would also likely put an end to his rumored return to the company he helped found.
An email to Kalanick was not immediately returned. A spokesperson for Uber declined to comment. Here’s a copy of the complaint.
Update August 10th, 4:19 pm ET: Via New York Times reporter Mike Isaac, here’s Kalanick’s response to the suit. The gist: “completely without merit and riddled with lies and false allegations,” the former CEO’s spokesperson says.