An Uber mess: Travis Kalanick vs Benchmark Capital tussle turning increasingly ugly

Gaurav Sharma
Uber CEO Travis Kalanick

The former chief executive of Uber, Travis Kalanick, has described a lawsuit filed against him by a major investor in the company co-founded as a meritless "public and personal attack", while the party in question has alleged "fraud" in a high stakes game of control.

The investor in question - venture capital firm Benchmark Capital, which owns 13% of Uber, is taking legal action against Kalanick to force him off the company's board, where he still has a seat, despite recently stepping down in the wake of a storm of controversies.

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The VC outfit first backed Uber in 2011. Five years later, in 2016, as part of change agreed by Benchmark, there were changes to Uber's board structure that expanded the number of voting directors by three, with Kalanick having the sole right to fill those seats.

However, in a lawsuit filed last week at the Chancery Court in Delaware, US, Benchmark alleged that Kalanick hid a number of misdeeds – including allegations of theft involving autonomous car technology secret, and misconduct by him and other executives in handling a rape committed by an Uber driver in India, when he asked the company's board to give him those extra seats.

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Benchmark claims it was "fraudulently induced" to agree to the change and wants Kalanick to give up control of those seats.

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. His legal representatives also argued the dispute should be handled in arbitration and that the Delaware court, where the lawsuit was filed, lacks jurisdiction.

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

Earlier this year, Benchmark was part of a group of investors who demanded Kalanick's resignation as CEO, before he eventually stepped down.

The lawsuit has divided Uber's board and many prominent shareholders have criticised Benchmark for taking legal action.

But in a statement, the VC firm said: "Resorting to litigation was an extremely difficult step for Benchmark. 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."

Showing no signs of backing down, this week, in an open letter to Uber employees, Benchmark alleged that Kalanick had undermined the search for his successor and was seeking to "create a power vacuum" in which he could return.

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