Uber Investors Come To Kalanick's Defense Over Fraud Lawsuit

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Uber investor Shervin Pishevar of Sherpa Capital and Stephen Russell came to the defense of the company’s former Chief Executive Officer Travis Kalanick in regards to the lawsuit that another investor — Benchmark Capital — filed against him earlier this month, alleging that he committed fraud by adding three new seats to the firm’s Board of Directors in mid-2016 and looking to completely oust him from the company he co-founded in 2009. In a letter sent to Uber’s board on Thursday, Mr. Pishevar claimed that Benchmark’s lawsuit is just an attempt of gaining control at the San Francisco, California-based ride-hailing service provider, stating that he and his supporters are adamant to fight the litigation by any means available.

Mr. Pishevar already criticized Benchmark’s lawsuit that he describes as “abuse” earlier this month when he proposed to buy out the investment firm’s stake in Uber. Benchmark currently owns 13 percent of the company and 20 percent of its voting rights, with its share being valued at approximately $9 billion. Bencharm is one of the earliest investors in Uber which originally committed $12 million to the tech giant that’s currently going through the largest internal crisis in its history, being without a leader and fighting a major legal battle with Alphabet’s self-driving subsidiary Waymo which accused it of using some of its trade secrets in its own autonomous vehicles. The issues prompted Benchmark and several other investors to pressure Mr. Kalanick to resign his top executive position in late June, shortly after he took a leave of absence following a personal tragedy that saw his mother killed and his father seriously injured in a May boating accident at Pine Flat Lake, California.

Benchmark is now claiming that Mr. Kalanick defrauded investors by adding three seats to Uber’s board last year, all of which turned out to be controlled by him. While two of those seats are presently empty, the third one is held by Mr. Kalanick himself and losing the case against Benchmark would see him completely ousted from the company. A spokesman for Mr. Kalanick previously called the lawsuit “a personal attack” and the defendant has since filed a motion to put the case through arbitration instead of having it tried in the public’s eye.