Mr. Chahal, founder and then-CEO of digital-ad company RadiumOne, was arrested and charged in August 2013 with 45 felony counts after San Francisco prosecutors alleged he struck his girlfriend more than 100 times over a 30-minute period in his apartment. A judge ruled in April 2014 that a home-security video recording of the incident was seized without a warrant and thus inadmissible as evidence. The alleged victim declined to testify. RadiumOne shook. Teetering on the brink of an IPO, the investors and board members scrambled to save what they could, reveal documents reviewed by the Journal, dated before the judge’s ruling.
They reveal the lengths to which RadiumOne board members and lawyers strategized on how to minimize the impact of the case on the planned IPO filing, which never materialized.
A venture capitalist with political ties sought to help Silicon Valley entrepreneur Gurbaksh Chahal “do whatever it takes” to resolve a domestic-violence case so that a planned initial public offering could move forward, according to documents reviewed by The Wall Street Journal.
Throughout the case Mr. Chahal, now 33 years old, claimed innocence. He was fired 10 days after pleading guilty to the misdemeanors. He received three years of probation and a $500 fine. Mr. Chahal has said the board betrayed him.
Venture capitalist and one-time California state controller Steve Westly, who joined RadiumOne’s board in November 2013, suggested in a Dec. 3, 2013, email to Mr. Chahal that lawyer Willie Brown, former San Francisco mayor and State Assembly speaker, “believes that he can help you.” Mr. Westly, who is considering a second run for governor, wrote that Mr. Brown knows the district attorney and “may be able to ‘back him off,’” adding that Mr. Brown is a “very good deal broker.”
Six days later, in an email with the subject line “Willie Brown,” Mr. Chahal wrote to Mr. Westly: “Just met him. Wants $1 million if he can make this go away. Just gave him a $250K retainer. If you meet him tomorrow. Apply some pressure on him to make this go away in 2013.”
Mr. Westly responded: “Wow. That’s pricey, but probably worth it if he can make it happen. I suspect he will pull out all the stops to get this done.”
Subsequent emails between Mr. Westly and Mr. Brown’s assistant show Mr. Westly trying to schedule meetings between the district attorney and Mr. Brown. The emails don’t show that any meetings ever took place. There is no evidence that Mr. Chahal and his supporters swayed the district attorney. The emails reviewed by the Journal are exhibits from a brief prepared by an attorney for Mr. Chahal for an outside mediator as Mr. Chahal negotiated a settlement with the company in July 2014 after his firing.
RadiumOne declined to comment to the Journal. Mr. Brown declined to comment to the Jornal. Mr. Westly declined to comment through a spokeswoman, who said he left the board in July 2015 to focus on his venture-capital firm.
A financial document, separate from the mediation-briefing exhibits, shows that days after Judge Brendan Conroy ruled the video inadmissible, Mr. Brown refunded $198,400 of Mr. Chahal’s retainer.
Mr. Chahal’s attorney, Patty Glaser, said she couldn’t comment on the emails mentioned in the mediation brief because it is confidential by state law. She said Mr. Brown had nothing to do with the outcome of the case.
The office for George Gascon, the San Francisco district attorney, said no meetings were scheduled between Mr. Gascon and Mr. Brown on the case. In a statement, Mr. Gascon said, “it was particularly frustrating when the video evidence was thrown out and the victim became uncooperative…. You have brought some documents and e-mails to our attention that we had no knowledge of. My office is not for sale.”
Judge Conroy said he can’t comment beyond what is public record.
Before his arrest, Mr. Chahal was a celebrated tech-firm founder who had sold his Internet advertising firm, BlueLithium, to Yahoo Inc. for $300 million in 2007. His domestic-abuse case drew heavy media attention in Silicon Valley.
According to the mediation brief by Mr. Chahal’s attorney, on Jan. 13, 2014, attorneys at Wilson Sonsini Goodrich & Rosati, which represents RadiumOne, discussed in emails whether the company would need to disclose a misdemeanor in an IPO filing as it would a felony. “It can be argued that passing small bad checks is more relevant to the integrity or ability of an IPO executive than the charges in our situation,” wrote Robert Latta, a partner at Wilson Sonsini.
Mr. Latta declined to comment for this article.
On Jan. 18, Mr. Westly sent a note to Mr. Brown through Mr. Brown’s assistant that “we can’t move forward with the IPO until we resolve [Mr. Chahal’s] legal issues. The board has asked me to work with you and [Mr. Chahal] to do whatever it takes to get this behind us.”
Some emails reflect consternation with Mr. Gascon, the district attorney. “Hopefully in the next day or so, once I win the inadmissibility [of the video of the domestic violence] the DA will finally back off,” Mr. Chahal wrote to attorneys on March 11. “Seems like Gascon needs to be visited with some domestic violence,” replied Mr. Latta, the Wilson Sonsini attorney.
On April 2, Judge Conroy ruled the video inadmissible. On April 16, Mr. Chahal wrote to the RadiumOne board that he was accepting “a small misdemeanor plea to resolve the matter.” That same day, board member Robin Murray emailed Mr. Chahal, saying “DELIGHTED for you amigo—onwards and upwards!!” Mr. Murray, who is still a director, declined to comment.
As RadiumOne prepared for the “bake-off” to select IPO bankers, news of Mr. Chahal’s guilty plea drew outrage on Twitter and tech blogs.
Bill Lonergan, then chief financial officer of RadiumOne, first texted Mr. Chahal not to heed the public criticism, according to screengrabs in the legal brief by Mr. Chahal’s lawyer. “I know this is terrible but you just have to ignore this,” Mr. Lonergan told Mr. Chahal. “The board has your back completely.…I don’t want to lose the bake-off.” Mr. Lonergan declined to comment.
Mr. Chahal responded angrily to critics. “Is the Internet this stupid to read one side of the story by tabloids vs. the actual truth?” he tweeted April 25.
The next day, the board of RadiumOne fired him, and the IPO plans fizzled.
“I feel 100% betrayed,” Mr. Chahal said in a Journal interview April 27, 2014. “This just shows you the greed of venture capitalists.”
Two days after Mr. Chahal’s firing, Mr. Lonergan, who stepped in as CEO, sent a memo to employees saying, “…the board offered that an outcome which prevented prolonged court proceedings might be in the best interest of the company but it never pressured [Mr. Chahal] into that course of action.”
Addressing the firing, he added: “Given recent developments, it became clear that Gurbaksh’s ability to lead the company had been severely compromised by the legal proceedings and ensuing developments” and that Mr. Chahal was terminated after he refused to resign.
Chahal posted a later-deleted blistering blog post on his personal site that promised litigation against his former board of directors, accusing them of sabotaging him after advising him to take the misdemeanor plea. In his post, Chahal wrote:
In the upcoming litigation there will be hundreds of other documents providing perspective on the greed, deception, and betrayal behind my termination. It will also shine light on how corrupt the human soul can become.
Chahal’s post included a link to a Dropbox with select emails from his case, including congratulatory and supportive emails from his board. It also, interestingly, included an email that board member Steve Westly sent to former San Francisco Mayor and California Assembly Speaker Willie Brown, requesting Brown speak to the district attorney about the case — and making note that RadiumOne could not file for an IPO and create more jobs until the case was resolved. In his blog post, Chahal wrote of Brown that “the board was pressing him on my personal matter.”
Chahal blames the firestorm around his ouster with giving his father a heart attack, recounts alleged misdeeds in his firing, and demands an apology from the RadiumOne board for bowing to public pressure. “Although an apology can’t reverse what has happened, it would’ve helped clarify the distorted situation and help us all move forward – integrity intact,” he wrote.
Chahal apparently had second thoughts– or was warned by his legal counsel — about the blog post. By following Monday, it was deleted, along with the email documents. A new post up, which is more along the lines of the inspirational entrepreneur genre went up. It is titled “Thinking Big — the Only Way to Go.”
Read WSJ article.