Former Uber CEO says fraud lawsuit defies common sense

by Frankie Norman August 19, 2017, 0:58
Former Uber CEO says fraud lawsuit defies common sense

Kalanick has already responded to the lawsuit, calling it a "public and personal attack".

However, in a response filed late on Thursday (17 August), Kalanick said Benchmark's legal action is part of an ulterior agenda to oust him from the company he helped found.

"Benchmark never suggested that the amendments were "fraudulently induced" or in any way unenforceable, although all of the events on which it bases its claim of fraud were well known to Benchmark", Kalanick's filing stated.

They also said that at the time of the said board change "Benchmark was fully aware of all of the allegations involving Kalanick".

As to Benchmark wanting to take away his power, Kalanick argues that it's not reasonable on multiple counts.

"Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO", the statement said.

Kalanick's court documents also state that Benchmark did not raise any questions about his leadership until the lawsuit was filed.

Venture capital firm Benchmark Capital, claims it owns 13 per cent of Uber with 20 per cent of the voting power.

"The Benchmark principals also handed Kalanick a draft resignation letter, and told him he had hours to sign it, or else Benchmark would start a public campaign against him", according to the court document.

Benchmark Capital's early investment in Uber has grown exponentially since the ride-hailing company's unicorn days.

The suit centers on Kalanick creating three additional seats on Uber's board of directors in 2016.

Kalanick - who had been the driving force behind Uber's massive global expansion, but whose brash style had made him a liability - still holds a large voting stake in the company, which is valued at $68 billion.

"According to Kalanick's legal team Benchmark's demands that he step down felt like an "ambush" following the death of his mother, and that "[Benchmark] executed its plan at the most shameful of times: immediately after Kalanick experienced a terrible personal tragedy".

It said a week-and-a-half after the funeral of Kalanick's mother, two Benchmark partners went to his hotel room and demanded he step down. "But failing to act now would mean endorsing behaviour that is utterly unacceptable in any company, let alone a company of Uber's size and importance".

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