Uber investors seek to oust Benchmark after 'destructive' lawsuit

Things could go from bad to worse for Travis Kalanick

Things could go from bad to worse for Travis Kalanick

Among other things, Benchmark said, Kalanick knew Uber might be accused of stealing trade secrets from Waymo, Google's self-driving auto unit. It claims Kalanick deliberately misled investors and found a way to remain involved with the company's decision-making via board seats that Benchmark alleges were "fraudulently procured".

A group of Uber shareholders is revolting against Benchmark Capital, the ride-sharing app's biggest investor, which filed a surprise lawsuit on Thursday that seeks to oust former CEO Travis Kalanick from the ride-sharing app's board.

The suit, which calls on a DE court to bar Kalanick from tinkering with the Uber board in any way, argued that Kalanick saw his resignation as unavoidable and finagled to "pack the board with loyal allies in an attempt to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO".

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.

The letter was referring to a May boating accident that killed Kalanick's mother and injured his father even as the hard-charging Uber co-founder was losing his position as CEO of the company.

While including Uber, the company, in the lawsuit seems a mere formality, the claims stated therein will undoubtedly hurt Uber too and not just Kalanick because it details past actions performed while Kalanick was still the CEO. The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick, and to reform its work environment. His spokesman released a statement that accused Benchmark of being the villain, acting against the interest of Uber or its employees and benefactors.

Besides claims of fraudulent behavior, Benchmark's lawsuit also notes several controversies that have put Uber in a pickle, including its dispute with Waymo, a mishandled rape case in India, sexist allegations, and its alleged tracking program called Greyball. Waymo sued Uber earlier this year.

Benchmark further stated that Kalanick still has a say in the Uber CEO search, and as a result, various potential candidates have backed out from participation. The firm says that Kalanick is trying to manipulate the board to get the maximum advantage for himself.

Kalanick announced an indefinite leave of absence in June, following the recommendation of an independent report from former attorney general Eric Holder regarding the company's culture.

Yet another sign Uber is looking to move on to its next phase: Ryan Graves, an early Uber employee and the only other person to serve as the company's chief executive, resigned on Thursday as senior vice president of global operations.

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