Uber investor sues former CEO Travis Kalanick, claiming fraud

Latest lawsuit sets up a power struggle over board of directors

Former Uber CEO Travis Kalanick is seen at the Academy Awards on February 26, 2017 (Reuters/Danny Moloshok)

Former Uber CEO Travis Kalanick has been sued by a major investor claiming he fraudulently concealed serious issues with the company, and sought power over the ride-for-hire firm "for his own selfish ends".

According to a complaint filed by Benchmark Capital Partners in a Delaware court, Mr Kalanick - who stepped down as CEO of the company earlier this year - “fraudulently obtained control” of seats on Uber’s board of directors by covering up “gross mismanagement and other misconduct.”

The examples listed offer a neat summation of the scandals and legal fights that have beset the Silicon Valley giant and links Mr Kalanick to all of them, arguing that he was aware of encroaching trouble but did not disclose that to investors.

They include: a now-fired executive who sought to obtain the medical records of a woman who was raped by an Uber driver in India; a controversial program known was “Greyball,” first revealed by the New York Times, that was used to elude municipal officials in cities where Uber operated; a “pervasive culture of gender discrimination and sexual harassment” that has illuminated overarching issues with sexism in the tech industry and helped precipitate Mr Kalanick’s departure; and an ongoing lawsuit in which Waymo, the self-driving car division of Google, claims Uber stole trade secrets.

By seeking to create three new board seats despite those corporate conflagrations, the lawsuit alleges that Mr Kalanick retained his leverage over the board of directors and guaranteed himself “an outsized role in Uber’s strategic direction even if forced to resign as CEO”.

In effect, the lawsuit seeks to block Mr Kalanick from reasserting influence over Uber by preventing him from filling two vacant board seats or, should he resign from the board, filling the post he formerly occupied.

In a statement, a spokesman for Mr Kalanick dismissed the lawsuit as "completely without merit and riddled with lies and false allegations," calling it a "transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder."

"Travis will continue to act in the interests of Uber and all of its stakeholders and is confident that these entirely baseless claims will be rejected," the statement added.

Uber said it had no comment on the lawsuit, and a spokeswoman for Brenchmark declined to comment.

Axios first reported the lawsuit’s existence.