Travis Kalanick who was recently ousted from his position as CEO of Uber after a long series of unfortunate events, is facing another major challenge. Kalanick was pressured by the company’s board of directors and investors to resign from his post. Now, that he has resigned, one of the company’s investors is suing Kalanick on the grounds of fraud.
Benchmark Capital, an early investor in Uber, is suing Kalanick, claiming he fraudulently concocted a scheme to retain control of the company. One of the partners at Benchmark also sits on Uber’s board.
The lawsuit, filed in Chancery Court in Delaware, centers on a plan that was approved by Uber stockholders in June 2016, to expand the board from 8 members to 11.
The arrangement gave Kalanick the power to choose the additional members, and when Kalanick lost the board seat reserved for the CEO following his forced resignation in June, he took one of those seats.
Benchmark claims Kalanick plotted the board expansion to insulate himself from the consequences of the many scandals plaguing the company, including allegations of widespread sexual harassment and discrimination, intellectual property theft lawsuits filed by Google’s Waymo, and a report that an Uber executive acquired the confidential medical records of a woman who was raped by an Uber driver in India in 2014.
“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,” the lawsuit, first reported by Axios, alleges. It also claims that Kalanick agreed to give up his power to appoint other board members, but has not yet done so.
“The lawsuit is completely without merit and riddled with lies and false allegations,” a spokesperson for Kalanick said in a statement. “This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders.” The statement says the lawsuit aims to “deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice regarding the management of the company he helped create.”