Benchmark Capital, one of Uber's most prominent investors, has filed a lawsuit against the ride-hailing company's founder and former chief executive, Travis Kalanick, calling for him to be removed from the company's board and escalating the tension between them.
The suit, first reported by Axios, accuses Kalanick of fraud, breach of contact and breach of fiduciary duty. Benchmark was the firm that originally circulated a draft letter urging Kalanick to step down as chief executive in June. It's also one of Uber's early investors, according to Reuters.
Uber, which is named as a “nominal defendant” in the suit but is not being accused of wrongdoing, declined to comment. Benchmark Capital did not immediately respond to a request for comment.
A spokesman for Kalanick said in a statement that the suit was “completely without merit and riddled with lies and false allegations” and that Kalanick is confident the claims will be rejected.
The suit specifically accuses Uber's founder of attempting to execute a “power grab” on the company's board, and for failing to tell investors about the series of troubling incidents that ultimately led to Kalanick's resignation. According to the suit, those include: Uber's legal battle with self-driving company Waymo; Uber's “Greyball” program designed to avoid local law enforcement; the reported mishandling of a rape case in India; and the “pervasive cultural issues” at Uber relating to sexual harassment claims.
The venture capital firm alleges in the filing, which was obtained by Axios, that when Kalanick was chief executive, he proposed adding three board seats while concealing information he believed would lead to his resignation. Benchmark argues that it would never have agreed to add those seats to the board — additions approved in June 2016 — if it had known about those incidents.
“Kalanick’s overarching objective is 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 — all to the detriment of Uber’s stockholders, employees, driver-partners and customers,” Benchmark said in a court filing.
Kalanick's place on the board, Benchmark says, is “improper and inequitable, and should be invalidated.” Benchmark asked for the removal of the three board seats.
The suit comes as Uber continues its search for a chief executive to replace Kalanick and right the ship — financially and in terms of its culture.
The firm, which originally sought to hire a female chief executive, has reportedly had trouble finding any women interested in the position and subsequently narrowed its final list down to three men.
Benchmark is also asking the court for a preliminary injunction that would block Kalanick from participating on the company's board — including the search for his own successor.
Benchmarks said in the filing that it has a 13 percent stake in Uber, while Kalanick has 10.
The suit was filed in Delaware Court of Chancery, where Uber and Benchmark are incorporated.