Lawsuit a personal attack: Ex-Uber chief

SAN FRANCISCO • The ousted chief executive of Uber Technologies rejected a lawsuit filed against him by one of the company's top investors, calling it a "public and personal attack" without merit, according to court documents filed on Thursday.

Venture capital firm Benchmark Capital, which says it owns 13 per cent of Uber and controls 20 per cent of the voting power, filed the suit last week to force Mr Travis Kalanick off the board, where he still has a seat, and rescind his remaining power there.

Mr Kalanick, in the first court filing in response to the suit, said it is part of a larger scheme to oust him from the firm he helped found and take away his rightful powers. He added that the dispute should take place in arbitration and that Delaware's Chancery Court, where the suit was filed, lacks jurisdiction.

The suit marks a rare instance of a well-regarded Silicon Valley investor suing the central figure at one of its own start-ups. It has stunned the venture capital community and divided the Uber board.

At issue is a change to the board structure last year that expanded the number of voting directors by three, with Mr Kalanick having the sole right to fill those seats.

In the suit, Benchmark said he hid from the board a number of misdeeds, including allegations of trade-secret theft and misconduct in handling a rape committed by an Uber driver in India, when he asked the board to give him the extra seats.

Benchmark said it was "fraudulently induced" to agree to the change, and wants Mr Kalanick to give up control of those seats.

But his filing said that, at the time of the change, "Benchmark was fully aware of all of the allegations". It made no mention of fraud and continued to publicly support him through May, said the filing.

Then, in June, Benchmark was part of a group of five investors who demanded his resignation as CEO.

"The Benchmark principals also handed Kalanick a draft resignation letter, and told him he had hours to sign it, or else Benchmark would start a public campaign against him," said the court document.

Benchmark backed Uber in 2011 with an investment of US$12 million (S$16 million). At the US$68 billion valuation that Uber achieved last year, Benchmark's stake would be worth almost US$9 billion.

"Resorting to litigation was an extremely difficult step for Benchmark," the firm said in a statement through a spokesman. "Failing to act now would mean endorsing behaviour that is utterly unacceptable in any company, let alone a company of Uber's size and importance."

The suit comes amid discussions by outside investors, including SoftBank, to buy a large chunk of Uber stock, although it is unclear if any transaction will occur.

The remaining six members of Uber's board issued a statement last week expressing their "disappointment" in the lawsuit.

Benchmark this week wrote an open letter to Uber employees, saying Mr Kalanick had undermined the CEO search and was seeking to "create a power vacuum in which Travis could return".


A version of this article appeared in the print edition of The Straits Times on August 19, 2017, with the headline 'Lawsuit a personal attack: Ex-Uber chief'. Print Edition | Subscribe