Bitcoin miner Mawson Infrastructure Group Inc., registered with NASDAQ, reportedly dismissed CEO Rahul Mewawalla in allegations of fraud and breach of fiduciary duty.
The lawsuit was launched in Delaware Premier Court, and the allegations range from alleged misconduct to misconduct.
Mewawalla denied fraud and pointed out previous results
Dismissal Rahul Mewawalla is a surprise to many as it happens a few months after Mawson’s $2.5 million cash bonus, a restricted stock unit of 1.2 million shares, and base salary increased to $1.2 million.
On May 30, the company told Mewawalla that the end of the “cause” was in consideration, as defined in his employment agreement, took place a few days later, with the board placing him on administrative leave and Kaliste Saloom as interim CEO.
The decision was made by July 8th. His board seat was revoked and the lawsuit he accused him of fraud and fiduciary violations was filed in Chancery Court in Delaware, seeking to recover the damages.
Mewawalla has not yet commented or responded to Mawson’s accusations. However, in a letter to the board on July 17th, he opposed the company’s version of the event “respectfully and vigorously” earlier this year, highlighting the board’s own public praise for his leadership.
He said in his recent public application that “many strategic, operational and financial milestones have been achieved” while he was CEO, including a revenue growth rate of 36%, a profit jump of 35%, and a reduction in SG and A costs.
Mawson made the headline after being sued several months ago
The dispute between Mawson and its CEO comes months after the company was sued by Nydig’s parent company, Stone Ridge and its mining subsidiary, accusing more than 20,000 ASIC miners of gaining value over $30 million and mining Bitcoin on its own.
Consensus and Mawson signed a colocation agreement in December 2023, which is expected to end by March 2025. However, there was a dispute over colocation fees and access to miners.
Mawson has issued a total invoice of $1,978,000 for colocation fees and electricity. This argues that Stoneridge has fought and there is a mutual agreement that there is less energy used in the final month of the contract.
Mawson is a lawsuit justified by citing the agreement provisions that Stone Ridge argues, as long as it changes the payment address of the miners and revokes access to the consensus officer.
We filed a lawsuit seeking an injunction to restore our hosting agreement, requiring that Mawson restore access to miners as part of the removal process. There have been no updates since then, but more updates are expected in the future, so the case has been filed.