Amid Fraud Lawsuit Against Travis Kalanick, Some Uber Investors Retaliate By Asking Benchmark To Vacate Its Board Seat
To an outsider, Uber's current situation looks messy and complicated. Why? Because that's exactly true.
A group of Uber investors has now come to the defense of ousted CEO Travis Kalanick after one of its largest investors, Benchmark, sued the former CEO for allegedly rigging the company's board seats to eventually return as its CEO.
Uber Shareholders Want Benchmark To Drop From Uber's Board
Benchmark sued Kalanick and Uber for many things, chiefly for fraud. Sherpa Capital, Yucaipa Companies, and Maverick announced on Friday, Aug. 11 that they were "distressed" to learn of the lawsuit against Kalanick. Axis was first to report on the shareholders' frustration.
In a letter sent to investors and the media, Shervin Pishevar of Sherpa Capital expressed concern about Benchmark's decision to sue, saying its tactics "strike us as ethically dubious and, critically, value-destructive rather than value enhancing."
That group of shareholders have now asked Benchmark to resign its board seat and appointment rights. They want Benchmark to step down from the company and divest at least 75 percent of its shares to lose board appointment rights, as The Verge reports.
"Benchmark's investment of $27M is worth $8.4 billion today and you are suing the founder, the company and the employees who worked so hard to create such unprecedented value," read the letter.
Why Benchmark Sued Travis Kalanick
The group of shareholders noted the lawsuit would only hinder the process of raising funds and searching for Uber's new CEO. For the uninitiated, Benchmark's lawsuit alleges that Kalanick purposefully packed the board with allies which could eventually pave the way for him to return as the company's leader, "Steve Jobs-ing" it, as he reportedly said. The lawsuit seeks to invalidate three board seat appointments voted for in June 2016, which will effectively drop Kalanick from the board.
Benchmark's lawsuit and the group's retaliation come as two of the latest in Uber's series of turmoil, both in the media and in its internal proceedings. Kalanick's dismissal was the collective result of the company's series of scandals, from sexist allegations to reports of its toxic culture to Kalanick being branded as a "pugnacious" leader, and more.
Uber is now in search of a new CEO. For a time it was believed Meg Whitman would follow Kalanick, but the CEO of Hewlett Packard Enterprise said she won't be leaving her current post. Her rejection blew Uber's hopes of hiring a woman for the job, which many somehow believed could have helped with Uber's sexist reputation.