'Destructive' lawsuit looms over scandal-hit Uber

SAN FRANCISCO • Uber is facing a divided board of directors and angry shareholders after investor Benchmark Capital filed a lawsuit against the firm's ousted chief executive, Mr Travis Kalanick, dealing another blow to Uber as it struggles to recover from a series of scandals and hire a new leader.

On Friday, three Uber investors asked Benchmark to divest its shares and step down from Uber Technologies' board, according to an e-mail published by news website Axios and confirmed by Reuters.

Benchmark's tactics are "ethically dubious and, critically, value-destructive rather than value enhancing", the investors wrote in the e-mail.

Members of the board sent an e-mail to Uber staff expressing dismay over the Benchmark lawsuit, according to a copy of the note. "The board of directors is disappointed that a disagreement between shareholders has resulted in litigation," the directors wrote. "The board has urged both parties to resolve the matter cooperatively and quickly, and the board is taking steps to facilitate that process."

The division and hostility emerging among the ride-services company's investors and directors is a highly unusual public battle for Silicon Valley.

In its lawsuit filed on Thursday, Benchmark is seeking to force Mr Kalanick off the board after he was compelled to resign as chief executive in June.

Investors Shervin Pishevar of Sherpa Capital, Mr Ron Burkle of Yucaipa Companies and Mr Adam Leber, an angel investor who works for music company Maverick, on Friday wrote an e-mail to shareholders and board members calling for Benchmark to remove itself from the board and divest its shares so that it would no longer have the right to appoint other board seats.

"We have investors ready to acquire these 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," said the e-mail, according to Axios.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on August 13, 2017, with the headline ''Destructive' lawsuit looms over scandal-hit Uber'. Print Edition | Subscribe