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Embattled WeWork CEO Neumann calls it quits citing increased scrutiny

Prior to his announcement, Neumann had faced pressure from board members tied to SoftBank, a major investor, according to people with knowledge of the matter

AFP | PTI  |  New York 

WeWork office
WeWork office

co-founder Adam Neumann said Tuesday he is stepping down as of the office sharing startup, calling the increased scrutiny he faced in recent weeks "a significant distraction."

Neumann's announcement, which confirmed earlier AFP reporting, comes as the startup faces questions over its governance and profit outlook that have clouded its prospects for going public.

Prior to his announcement, Neumann had faced pressure from board members tied to SoftBank, a major investor, according to people with knowledge of the matter.

Neumann also met Sunday with Jamie Dimon, of JPMorgan Chase, the lead underwriter for the company's initial public offering, and the encounter weighed on Neumann's decision to step down, the sources said. He has come under scrutiny for perceived self-dealing as head of the fast-growing enterprise.

In its prospectus to go public, disclosed that it had leased from entities in which Neumann "has or has had a significant ownership interest." Neumann will remain as chairman of the company he started in 2010 and also continues to control a majority of voting shares.

"As co-founder of WeWork, I am so proud of this team and the incredible company," Neumann said.

"While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive." The company named as co-CEOs Chief Financial Officer Artie Minson and former vice chairman Sebastian Gunningham.

"We would like to thank Adam for his vision and his passion in building over the past 9 years," Minson and Gunningham said in a news release.

"Our core business is strong and we will be taking clear actions to balance WeWork's high growth, profitability and unique member experience while also evaluating the optimal timing for an IPO.

First Published: Wed, September 25 2019. 01:05 IST
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