Abu Dhabi, UAEWednesday 20 November 2019

Uber's Kalanick reignites power struggle, names two to board

Surprise move publicly reignited a board battle over the role of former chief executive

Uber Technologies co-founder Travis Kalanick has appointed two new directors, a surprise move that publicly reignited a board battle over the role of the ousted former chief executive.

Uber investors are divided over whether Mr Kalanick, who was pressured to step down as the chief executive earlier this year in the wake of several company scandals, should himself be on the board and whether he can name two other directors.

The company and its new chief executive Dara Khosrowshahi are scrambling to portray Uber as a reformed company that is responding to concerns including sexual harassment claims and a US bribery probe.

Mr Kalanick, still one of the largest shareholders, said in a statement on Friday he had appointed former Xerox chief executive Ursula Burns and former Merrill Lynch chief executive John Thain as directors.

"I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights. It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members," he said, He did not specify the proposals he opposed.


Read more:

On the move: why London's black cabs are Uber and out

Uber ban: London’s mayor ‘pleased’ as taxi firm’s CEO issues apology


The appointments were a "complete surprise" to Uber and its board, the company said in a statement. "That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of,” it added.

An investor who has supported Mr Kalanick, Yucaipa Companies managing partner Ron Burkle, praised the appointments on Friday, calling Ms Burns and Mr Thain "smart, high-quality people."

Division among Uber investors exploded in public in August, when Benchmark Capital filed a lawsuit to force Mr Kalanick off the board and rescind his ability to fill two other seats on the panel, accusing him of concealing a range of misdeeds. Yucaipa and other Uber investors defended Mr Kalanick and asked Benchmark to divest its own shares and step down from the board.

A Delaware judge later that month stayed the Benchmark lawsuit and sent it to arbitration, pushing the dispute out of public view and delivering Mr Kalanick a victory.

Mr Kalanick’s action on Friday could be subject to a new legal challenge. Benchmark or other Uber investors could attempt to block the appointments by asking the Delaware judge to issue a so-called "status-quo order." The judge last month did not grant such a request.

Mr Kalanick's lawyer at the time told the court that he he had not rushed to fill the seats. The New York Times also quoted Mr Kalanick's lawyer as telling the court that Mr Kalanick had the power to fill the seats under the pre-arbitration "status quo."

Benchmark did not immediately respond to a request for comment.

Updated: September 30, 2017 11:25 AM