Uber's Kalanick reignites power struggle, names two to
board
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 [September 30, 2017]
By Paresh Dave
SAN FRANCISCO (Reuters) - Uber Technologies
Inc [UBER.UL] co-founder Travis Kalanick on Friday said he had 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 Kalanick, who was pressured to
step down as CEO 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 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 U.S. bribery probe.
Kalanick, still one of the largest shareholders, said in a statement 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 as Ursula and John," he said. He did not specify the proposals
he opposed.
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 Kalanick, Yucaipa Companies managing
partner Ron Burkle, praised the appointments on Friday, calling Burns
and Thain "smart, high-quality people."
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Uber co-founder Travis Kalanick. REUTERS/Danny Moloshok
Division among Uber investors exploded in public in August, when Benchmark
Capital filed a lawsuit to force 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 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 Kalanick a
victory.
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.
Kalanick's lawyer at the time told the court that Kalanick had not rushed to
fill the seats. The New York Times also quoted Kalanick's lawyer as telling the
court Kalanick had the power to fill the seats under the pre-arbitration "status
quo."
Benchmark did not immediately respond to a request for comment.
(Reporting by Liana B. Baker and Paresh Dave; Writing by Peter Henderson;
Editing by David Gregorio and Lisa Shumaker)
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