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Why Uber investors want Benchmark Capital to walk away

13 August, 2017, 22:20 | Author: Nadine Todd
  • 2017 Mini Countryman Front Right Quarter

While Graves has voiced his plan to resign, it was the spokesperson of former Uber CEO Travis Kalanick who issued a statement that Kalanick would continue to represent Uber as a board member - despite a lawsuit. It's also asking the court to prevent Kalanick from participating in board meetings.

The venture capital firm alleges Kalanick "fraudulently" obtained the power in 2016 to name three additional members to the company's board of directors.

If Kalanick is allowed to stay on at Uber, the suit says the company will "suffer irreparable harm and needlessly face considerable reputational, regulatory and other risks", noting that the firm's search for a new CEO has already been affected due to his interference.

Benchmark says Kalanick was aware of these issues in 2016 when the board made a decision to increase the number of voting directors from eight to 11.

In the past year alone, Kalanick has been accused of fostering a toxic work environment ridden with sex-harassment allegations, bleeding top talent and stealing trade secrets by hiring a Google executive to lead its driverless-car initiative.

Uber declined to comment.

A spokesperson for Mr Kalanick said the legal action is "completely without merit and riddled with lies and false allegations".

Benchmark has a 20 percent stake in the company's voting rights, according to the lawsuit. The suit accuses the former CEO of mismanagement and packing the board with supporters.

Now valued at close to $70 billion ($A89 billion), it has fast become the world's most valuable start-up.

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.

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.

Forbes Middle East reported last week that Benchmark released a Twitter statement made on August 7 expressing their "confidence in Uber's 1000s of employees & are excited about what they will accomplish with the right new CEO".

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