Bitcoin Miner Mawson Fires CEO Amid Fraud Allegations
Nasdaq-listed bitcoin mining company Mawson Infrastructure Group Inc. has reportedly fired its CEO Rahul Mevawalla amid allegations of fraud and breach of fiduciary duty.
The lawsuit was filed in Delaware Chancery Court and the charges range from alleged fraud to unethical conduct.
Mevawalla denies the allegations, citing his past achievements
Rahul Mevawalla's firing came as a surprise to many , coming just months after Mawson paid him $2.5 million in cash bonuses, 1.2 million restricted shares and increased his base salary to $1.2 million as a reward for what the company said was “high performance” as an executive.
On May 30, the company notified Mevawalla that it was considering terminating his employment for “cause” specified in his employment contract, and a few days later the board placed him on administrative leave, temporarily appointing general counsel Calista Salum as acting CEO.
By July 8, a decision had been made: his seat on the board was revoked and a lawsuit was filed in the Delaware Court of Chancery alleging fraud and breach of fiduciary duty seeking damages.
Mevawalla has not yet commented on or responded to Mawson's allegations. However, in a letter to the board on July 17, he “respectfully and forcefully” expressed his disagreement with the company's position, noting that the board had publicly praised his leadership earlier this year.
He also noted that in recent public filings, the company highlighted “numerous strategic, operational and financial achievements” during his leadership, including 36% revenue growth, a 35% increase in gross profit and a reduction in selling and administrative expenses.
Mawson has attracted media attention due to a lawsuit filed against her several months ago.
The dispute between Mawson and its CEO comes months after NYDIG's parent company, Stone Ridge, and its mining subsidiary, Consensus Colocation, sued the company, accusing it of allegedly illegally obtaining more than 20,000 ASIC miners worth $30 million and using them to mine bitcoin for itself from February 28, 2025.
The colocation agreement between Consensus and Mawson was signed in December 2023 with the intention of terminating by March 2025. However, disputes have arisen over colocation fees and access to miners.
Mawson billed a total of $1,978,000 for equipment placement and energy, which Stone Ridge disputed, arguing that there was a mutual agreement to reduce energy consumption in the final month of the contract.
Mawson even changed the payout address for miners and revoked access for Consensus employees, justifying its actions by citing a provision in the agreement that Stone Ridge believes is not applicable.
The company filed a lawsuit seeking an injunction that would reinstate the hosting agreement and demanded that Mawson restore access to the miners in the process of removal. No new information has been released since then, but the case has been filed and more updates are expected in the future.
Source: cryptonews.net
