Uber investors seek to oust Benchmark after 'destructive' lawsuit

Uber founder Travis Kalanick stepped down from his chief executive position in June

Uber founder Travis Kalanick stepped down from his chief executive position in June

Shareholders of Uber Technologies Inc. are feuding over a key investor's decision to sue the ride-hailing company's board and former CEO.

Benchmark Capital Partners, one of Uber's earliest investors, filed a lawsuit in Delaware Chancery Court on Thursday (10 August) to force him off Uber's board of directors and block his ability to fill three board seats. It accused Kalanick of breaching his fiduciary duty and contractural obligations by loading up Uber's board with friends. In a letter, the investor even warned that an "escalation of this fratricidal course" would "interfere with fundraising" and the ongoing search for a new chief executive at Uber.

The complaint alleges Kalanick's motive was to pack the board with allies, eventually paving the way for him to return as Uber's CEO.

Benchmark claimed in its suit that it would never have approved a 2016 expansion of Uber's board that allowed Kalanick to fill a board seat had it been aware of the controversy surrounding Kalanick and of Uber's cultural problems. Among other things, Benchmark said, Kalanick knew Uber might be accused of stealing trade secrets from Waymo, Google's self-driving auto unit. Axios was first to report on the lawsuit.

But it would seem being CEO is far different than maintaining control as a board member, for just as quickly, he appointed himself to one of three board seats, so that Uber's members of the board now number 11 instead of the previous eight.

According to Pishevar, Benchmark's lawsuit has "held the company hostage to a public relations disaster".

A spokesperson for Mr Kalanick said the legal action is "completely without merit and riddled with lies and false allegations". Graves will remain on Uber's board.

Ryan Graves told Uber staff in an email Thursday that he will transition out of his role as senior vice president of global operations in mid-September.

The shareholders said they had investors ready to acquire the shares "as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75 per cent of their holdings".

Uber said it had no comment on the lawsuit. The suit accuses the former CEO of mismanagement and packing the board with supporters.

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