Uber investor sues to force former CEO Travis Kalanick off board

Travis Kalanick attends the summer World Economic Forum in Tianjin, China on June 26, 2016.
Travis Kalanick attends the summer World Economic Forum in Tianjin, China on June 26, 2016.PHOTO: REUTERS

SAN FRANCISCO (REUTERS) - Venture capital firm Benchmark Capital is suing former Uber chief executive officer Travis Kalanick to force him off the board of the ride services company and rescind his ability to fill three board seats, according to the lawsuit.

The lawsuit filed on Thursday (Aug 10) accuses Kalanick of concealing a range of misdeeds from the board and scheming to retain power at the company even after he was forced to resign as chief executive of Uber in June following a series of scandals.

Benchmark's lawsuit marks a rare instance of a Silicon Valley investor suing a central figure at one of its own start-ups. The well-regarded venture firm was an early investor in Uber and said in the lawsuit that owns 13 per cent of Uber and controls 20 per cent of the voting power.

Uber declined to comment. Benchmark Capital and a spokesman for Kalanick did not immediately respond to requests for comment.

The litigation in Delaware court also opens another chapter in a saga of woe at Uber that has cast doubt on the future of the world's most highly valued startup company, worth US$68 billion (S$92 billion).

Uber's troubles include a trade-secret lawsuit by Alphabet's Waymo unit that led to the departure of a star engineer and hobbled Uber's self-driving car program; sexual harassment allegations that led to a major internal investigation and the dismissal of several top executives; and alleged misconduct by Kalanick and other executives in handling a rape committed by an Uber driver in India.

In its lawsuit, Benchmark argued that Kalanick was aware of these problems when Uber's board in 2016 agreed to expand the number of voting directors from eight to 11, with Kalanick having the sole right to designate those seats.

Benchmark which holds one of the seats on the Uber board, said that it never would have given Kalanick the three extra seats if it had known about his "gross mismanagement and other misconduct at Uber," the lawsuit said.

Kalanick appointed himself to one of the seats after he was ousted as CEO, and the other two remain vacant.

Kalanick was trying 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," Benchmark said in the lawsuit.

The lawsuit was first reported by news website Axios.