Image copyright AFP Image caption Elizabeth Holmes is the founder and former CEO of Theranos
Theranos founder Elizabeth Holmes has testified under oath that her former chief operating officer, Ramesh “Sunny” Balwani, mistreated and abused her and the company’s staff.
Theranos alleges that Mr Balwani was financially incentivised to sell the company and its technology to other labs, with the long-term goal of destroying it.
On Wednesday, under questioning from Theranos lawyer, Dan Ellis, Ms Holmes said the abuse was ongoing, with Mr Balwani giving employees “lone wolf” tours of the offices.
“I never got a single moment when I really felt safe in the company,” Ms Holmes told the court.
Ms Holmes, speaking from the witness stand at her company’s fraud trial in California, added: “It was an environment where workers were mistreated and mistreated for years.”
She said the abuse reached such a point that staff would refer to Mr Balwani as the “siege guy”.
Defence attorney John Hueston was quick to challenge Ms Holmes’s recollection, pointing out that she was familiar with some of the voicemails, e-mails and messages sent to her by her former boss.
Earlier, at a legal hearing, Mr Hueston said that most employees had left the company in frustration and they were motivated to leave because they felt blindsided and mistreated by Mr Balwani and his “meticulous planning” to destroy the company and its technology.
Ms Holmes denied these claims. She also told the court that there were discussions going on with JPMorgan Securities, the bank which had loaned Theranos $85m (£63m) in 2015, and that she considered the issue of the fraud case to be “not a black or white issue”.
Theranos’ case rests on the suggestion that the company had a “pipeline” of customers lined up that would later buy its proprietary blood testing technology.
The company is alleged to have deceived investors by failing to follow through on these “supply” agreements and then covering up its failure to deliver.
The technology should have been tested on a population of patients and then validated by independent scientists, it alleges.
Instead, it claims that the company misled investors by ensuring that all staff and their families underwent the same tests.
Ms Holmes, who founded Theranos in 2003, has claimed that the company’s technology could produce tests on minute amounts of blood.
Until recently, it had been valued at $9bn. It was acquired by Walgreens in 2016 for a reported $1bn.
Theranos this week stated that Mr Balwani – who is currently serving a three-year prison sentence in Arizona for fraud – failed to pay back the bond debt by December 2016, which meant that the company lost the $85m loan.
Walgreens in December 2017 applied to the court to invalidate the agreement between the two companies, which the company said would have permitted Theranos to continue running its testing technology.
Theranos says the request failed due to technical paperwork issues, which now make it impossible for the parties to finalise the paperwork for the deal.
In its defence, Walgreens has said that if the agreement is not updated, Theranos could request to be paid back the $1bn in damages that it owes Walgreens, bringing its owed balance up to $250m.
The hearing is scheduled to conclude on Friday.
The verdict is not expected for several months.
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