Uber Technologies’ efforts to complete an investment by SoftBank Group that would inject billions of dollars into the ride-hailing company is at risk, thanks to former CEO Travis Kalanick.
Citing people familiar with the matter, The Wall Street Journal reported news that Kalanick is fighting with other Uber board members over the amount of power he has at the ridesharing company, which is preventing the SoftBank investment from closing.
The paper reported that, in the past few days, Uber inked an agreement in principle with investors led by SoftBank that would overhaul the board and change other areas of corporate governance. It would also make SoftBank a powerful partner, thanks to Chief Executive Masayoshi Son. The investment could be worth as much as $10 billion.
Kalanick, who stepped down earlier this year, informed board members that in order for the deal to go through, he wants removed a provision that would require the majority of the board to back any director he appoints down the road. He also wants a temporary stay on a lawsuit that Benchmark Capital, a huge investor in the ridesharing company, lodged against the former CEO over his two board seats. If a stay can’t happen, Kalanick wants a formal guarantee that the lawsuit will be dropped after the SoftBank investment is completed.
Although Kalanick doesn’t have majority voting power at the company, investors still want him to sign off on the investment, given a lot of the corporate governance changes could impact him.
According to the WSJ, while a deal could still be reached, Kalanick’s pushback underscores the role he still plays in the ride-hailing company even after he was ousted four months ago. The fight with Uber’s board could also hurt the stability that has come to the company since Kalanick’s replacement, Dara Khosrowshahi, was named CEO.
Kalanick was given the two board seats in June of 2016. Benchmark launched a lawsuit in August to force the ousted executive to give up those two board seats. In the fall, Kalanick named Xerox Corp. CEO Ursula Burns and ex-CIT Group, Inc. CEO John Thain to those two seats without first getting the blessing of the other directors.