First Free Story (1 of 3)Join Skift Pro
Virgin Hyperloop One replaced three directors and a fourth was arrested, the latest signs of turmoil at the futuristic transportation startup.
A list of directors that was updated on the company’s website Monday showed three members stepped down from the 10-person board: Jim Messina, a former adviser to President Barack Obama; Jim Rosenthal, a former Morgan Stanley executive; and Peter Diamandis, founder of X Prize.
New board members are Bill Shor of Caspian Venture Capital; Yuvraj Narayan, chief financial officer of DP World; and Anatoly Braverman of Russia’s sovereign wealth fund. The changes were made several weeks ago, a person familiar with the situation said.
A fourth board member, Russian billionaire Ziyavudin Magomedov, was arrested in Moscow on charges of fraud and embezzlement unrelated to Hyperloop. Marvin Ammori, the general counsel, also left the startup recently, people familiar with the matter said. He was replaced by Laura Lariu, now acting general counsel. Neither the company nor Ammori responded to requests for comment. Magomedov is appealing the arrest, his lawyer told Interfax.
The changes come as Hyperloop tries to steer itself out of a bumpy situation. Co-Founder Shervin Pishevar took a leave of absence in December after Bloomberg reported on multiple claims of sexual misconduct. He denied all allegations of inappropriate conduct. Virgin’s Richard Branson replaced Pishevar as chairman. Earlier this year, Bloomberg reported that chief financial officer Brent Callinicos had left that position. Carl Jenkins, the senior vice president for hardware engineering, also departed.
Late last year, the company raised $50 million as it was running low on cash. It’s now making a big push to win a contract to build the first commercial version of its proposed transportation system, which is like a train but much faster. It’s eyeing possible sites for development, including Dubai. On Sunday, Branson and Chief Executive Officer Rob Lloyd hosted Saudi Arabia Crown Prince Mohammed bin Salman at a Virgin Galactic U.S. facility in the Mojave Desert, where they showed off a Virgin Hyperloop One pod—similar to a train carriage.
The long-term status of Magomedov’s board seat is unclear after his unrest over the weekend. Magomedov was co-chairman with Pishevar before Branson stepped in, and his firm, Caspian Venture Capital, is a major backer. Before the Virgin deal, Caspian made an unsuccessful offer to buy the company.
©2018 Bloomberg L.P.