Uber shareholder group wants early investor off board
The battle for control of Uber took another unexpected turn Friday when a shareholder group led by some of the company’s top investors reportedly asked for the removal of a key venture capital firm from the ride-hailing giant’s board.
The group is seeking the removal of Benchmark Capital, which filed a lawsuit against Uber’s founder and former chief executive, Travis Kalanick, on Thursday. Benchmark accused Kalanick of gross mismanagement and hopes to quash any attempt by Kalanick to return as head of the company.
The shareholder group is led by Shervin Pishevar, head of Sherpa Capital; Ron Burkle, chairman of Yucaipa Co.; and Adam Leber, a partner at Maverick, an entertainment management firm, according to Axios, which first reported news of the action.
“We would request that Benchmark help the company realize its full potential by allowing the necessary work to be done in the board room rather than the courtroom,” the shareholders wrote in a letter to the board.
The public sparring between high-powered venture capitalists and investors is highly unusual in Silicon Valley. But tension has been simmering at Uber after Kalanick stepped down in June amid a series of controversies and missteps that have clouded the future of a start-up thought to be valued at $68 billion.
Uber declined to comment and the shareholder group did not immediately respond to a request for an interview.
Benchmark could not be reached for comment, but posted a series of tweets Monday saying it was still optimistic about Uber’s future.
In the letter, the shareholder group said it was surprised by Benchmark’s suit, which it described as “ethically dubious” and a risk to the company’s value.
“Specifically, we do not feel it was either prudent or necessary from the standpoint of shareholder value, to hold the company hostage to a public relations disaster by demanding Mr. Kalanick’s resignation,” they wrote.
In its suit, Benchmark alleges that in mid-2016, Kalanick committed fraud when he persuaded the board to approve three new members for which he would have appointment power, without first informing them of a series of events he was allegedly involved in or privy to that would later lead to his forced resignation.
Those events included a lawsuit by Google’s self-driving-car subsidiary, Waymo, alleging theft of trade secrets; another lawsuit by a woman in India who alleged Uber obtained her medical records after she was raped by one of the company’s drivers; and widespread allegations of sexual harassment at the firm.
Benchmark wants to invalidate those three board seats, which would block any chance of Kalanick returning to a key role at Uber as he has been said to want. Benchmark also seeks potential damages from Kalanick, but none from Uber, although it is named in the lawsuit.
The shareholder group is asking Benchmark — which led the effort for Kalanick’s ouster — to divest itself of enough shares to surrender board appointment rights.
“We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75% of their holdings,” the letter said.
Twitter: @dhpierson
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