Tech: Former Uber CEO Travis Kalanick sued for alleged fraud by early Uber investor Benchmark Capital

The VC firm and early Uber investor is also suing Kalanick for alleged breach of contract and breach of fiduciary duty, according to Axios.

Early Uber investor Benchmark Capital is suing former Uber CEO Travis Kalanick over claims he committed fraud in 2016, according to a lawsuit filed on Thursday in Delaware Chancery Court.

The suit centers around the creation of three additional board seats at Uber in June 2016. At the time, Kalanick inserted a provision that gave him the "absolute right" to select three directors to fill the seats. Kalanick selected himself to fill one of the seats following his departure as CEO.

Benchmark Capital is saying they would never have approved the board expansion had it been aware of the controversy surrounding Kalanick and Uber's cultural problems, accusing the former CEO of mismanagement and packing the board with supporters.

Axios' Dan Primack was first to report the news on Thursday.

Benchmark Capital is now calling for Kalanick's removal from Uber's board. Benchmark Capital, which has a board seat at Uber, led in 2011 an $11 million Series A investment in the company.

"In 2016, Kalanick fraudulently obtained control of three newly created seats on Uber’s Board by his material misstatements and fraudulent concealment from Benchmark of material information that would have led Benchmark to reject the creation of the seats," Benchmark Capital wrote it its complaint.

Uber wrote in a statement that the lawsuit is "without merit and riddled with lies."

"The lawsuit is completely without merit and riddled with lies and false allegations. This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders. Benchmark's lawsuit is a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice regarding the management of the company he helped create. Travis will continue to act in the interests of Uber and all of its stakehodlers and is confident that these entirely baseless claims will be rejected."

The suit claims Kalanick induced Benchmark to approve the board expansion to his own personal benefit and "intentionally concealed and failed to disclose his gross mismanagement and other misconduct at Uber."

Uber has been under the spotlight following reports of pervasive gender discrimination and sexual harassment at the company. The ride-hailing giant is also being sued by Waymo, Google's sister company, over claims it stole intellectual property to advance its own autonomous-car development.

Five of Uber's major investors forced Kalanick to step down in late June. Benchmark was reportedly one of the loudest voices calling for Kalanick's removal as CEO.

You can read Benchmark Capital's full complaint below:

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