SoftBank may drop its proposed investment in Uber if it's unable to settle a dispute related to the corporate powers of Travis Kalanick, the co-founder and former Chief Executive Officer of the ride-hailing giant, The Wall Street Journal reported on Wednesday, citing people familiar with the situation. The Japanese conglomerate has been seeking to limit the pull Mr. Kalanick still holds at the company he was ousted from earlier this year through a clause found in its provisional investment agreement with Uber. The stipulation mandates Mr. Kalanick's ability to appoint Uber directors without a majority vote from the rest of the board be stripped of him, with the 41-year-old reportedly being adamant to have the article dropped before approving the deal that may lead to the largest private stock sale in history, with the entire transaction being valued at up to $10.5 billion.
While Uber's co-founder doesn't hold the majority voting power at the company in an official capacity, many other investors would still require him to greenlight the deal in which he also has a personal stake; SoftBank is seeking to add six new seats to Uber's board, two of which it would take for itself, thus additionally limiting the co-founder's voting powers. A related issue is an ongoing lawsuit filed by Uber's major investor Benchmark Capital against Mr. Kalanick, with the company labeling his 2016 move to create more board seats at the San Francisco startup as a fraud. SoftBank insists the lawsuit that's set for private arbitration be stayed or dropped should its investment be completed, with Benchmark reportedly being prepared to do so if the provision seeking to limit Mr. Kalanick's powers at Uber remains part of the deal.
It's currently unclear how is Mr. Kalanick intending to go about having the provision dropped or if SoftBank is even open to a compromise, though sources suggest that some kind of a solution may still be reached. The Japanese tech giant is also reportedly on the brink of pulling out of another major business deal over corporate power issues, with industry insiders recently claiming that the widely reported consolidation of Sprint and T-Mobile may not be agreed after all due to SoftBank's insistence on not yielding full control of the theoretical combined entity to Deutsche Telekom.