Uber's co-founder and former CEO Travis Kalanick's troubles seem to be mounting. Key investor Benchmark filed a lawsuit yesterday in which it claimed that Kalanick tricked them by appointing three board members. The lawsuit also demanded that the former CEO be removed as the director of the company. Venture capital firm Benchmark and Kalanick have been at loggerheads for quite a while.
Fresh troubles
The battle between Benchmark and Travis Kalanick is quite well documented. The campaign to oust Kalanick as CEO of Uber was led by Bill Gurley, one of the partners at Benchmark.
However, in spite of having been ousted as the CEO, Kalanick remained on the board. Benchmark is one of the earliest investors in the company and holds a significant (13% ) stake in Uber. According to a report by Bloomberg, Benchmark's lawsuit claims that the former CEO appointed three board members who are close to him and continue to wield a lot of power over the board.
The lawsuit filed by Benchmark states as much, “Kalanick acquired a disproportionate level of influence over the Board, ensuring that he would continue to have an outsized role in Uber’s strategic direction even if forced to resign as CEO.” Uber's troubles over the past year or so are quite well documented, and the scandals that engulfed the company eventually led to the ouster of Travis Kalanick as the CEO.
In addition to that, plenty of top executives had to resign as the company went into meltdown.
Big problem for Uber
According to David Larcker, a corporate governance expert at Stanford University, the lawsuit poses a big problem for Uber. Larcker stated that it is indeed problematic when the founder of a company is accused of corporate misgovernance by one of the earliest investors in the company.
Benchmark's lawsuit has accused Kalanick of "fraudulently" usurping three board seats and went on to state that he concealed the way in which he had "grossly" mismanaged the company.
According to the Bloomberg Report, Bill Gurley had been a big admirer of the company and had been a key decision maker. In fact, Gurley had head hunted many of the executives who joined the company.
However, his relationship with Kalanick soured at some point earlier this year, and he soon became a well-known critic of the former CEO. In June, he assembled other key shareholders and started the campaign that eventually led to the ouster of Kalanick as the CEO of Uber. Benchmark has one of the largest stakes in the company and needless to say, Kalanick could be in more trouble.
