TuSimple Holdings Inc.,
self-driving truck company, said on Monday that it has fired its CEO and co-founder Xiaodi Hou.
The San Diego-based company said in a news release and securities filing that its board of directors on Sunday removed Mr. Hou, who was also chairman of the board and chief technology officer.
Mr. Howe was fired in connection with an ongoing investigation by board members, the release said. That review “led the Board to conclude that a change in CEO is necessary,” the company said in a statement.
Securities filings said the board’s investigation found that TuSimple this year shared confidential information with Hydron Inc., a trucking startup with operations primarily in China and funded by Chinese investors. The filing also said TuSimple’s decision to share confidential information with Hydron was not disclosed to the board before TuSimple has entered into a business deal with Hydron.
TuSimple said it did not know whether Hydron had shared or publicly disclosed the confidential information.
In a statement posted on LinkedInMr Howe has pleaded not guilty and said his dismissal was “without cause”.
“Unfortunately, the board’s processes and conclusions are questionable at best,” Mr. Hou wrote. “As the facts come to light, I am confident that my decisions as CEO and Chairman and our vision for TuSimple will be vindicated.”
Mr. Howe’s termination was announced a day after The Wall Street Journal reported that TuSimple and its management, mainly Mr. Howe, were facing investigations by the Federal Bureau of Investigation, the Securities and Exchange Commission and Committee on Foreign Investment in the United States, known as Cfiuswhether the company improperly funded and transferred technology to Hydron, according to people familiar with the matter.
TuSimple shares fell 45% on Monday afternoon. The company’s shares are down more than 90% for the year.
FBI and SEC investigators are looking into whether Mr. Hou violated fiduciary duties and securities laws by failing to properly disclose TuSimple’s relationship with Hydron, the Chinese-backed startup founded in 2021 by TuSimple co-founder Mo Chen, who says it is developing autonomous hydrogen-powered trucks, the Journal reported. Federal investigators are also looking into whether TuSimple shared U.S.-developed intellectual property with Hydron and whether that act defrauded TuSimple’s investors by sending valuable technology to an overseas adversary.
Mr. Chen did not immediately respond to a request for comment.
The newspaper also reported that the board in July began to study such problems, including whether TuSimple incubated Hydron in China without informing regulators, TuSimple’s board or its shareholders. A business presentation from Hydron in June reviewed by the Journal named TuSimple as Hydron’s first customer and said TuSimple would purchase from Hydron several hundred hydrogen-powered trucks equipped with self-driving technology. A spokesperson for TuSimple said the company had considered an agreement to purchase cargo trucks from Hydron, but was not a Hydron customer.
Mr Howe said in his statement that he had co-operated fully with the board and that “I have nothing to hide”.
“I want to be clear that I fundamentally deny any suggestion of wrongdoing,” Mr Howe said.
TuSimple’s securities filings on Monday said TuSimple employees worked for Hydron and were paid, earning less than $300,000. The board was not aware of it, nor did members approve it, the filing said. Mr. Chen, who runs Hydron, is TuSimple’s largest shareholder, owning about 11.8 percent of the company, according to FactSet.
Mr Hou said he had not sold any TuSimple shares and would continue to hold his stake as long as he could. He owns about 11.3 percent of the company, according to FactSet.
Mr Hou’s dismissal follows months of upheaval at the company, including the departure of its chief financial officer and chief legal officer. Much of the turmoil began when Mr. Howe took over as chief executive in March, former officials said.
In April, one of TuSimple’s autonomous semi-trucks crashed on a highway in Arizona. The incident revealed safety and security issues at TuSimple, which former employees said management fired, the Journal reported in August.
TuSimple was founded in 2015 and went public in April 2021, raising more than $1 billion at an $8.5 billion valuation in the process. The company develops autonomous driving systems that it aims to integrate into large platforms produced by some of the world’s largest truck manufacturers. Its partners include Navistar International Corp. and Traton, a publicly traded company
a subsidiary that manufactures trucks.
TuSimple said Ersin Yumer, the company’s executive vice president of operations, will serve as interim CEO while the board searches for Mr. Howe’s successor. Mr. Hummer previously worked on autonomous vehicle technology at
Aurora Innovation Inc.,
Uber Technologies Inc.
and Argo AI, autonomous driving venture partly owned by
Ford Motor Co.
which was closed recently. Independent board director Brad Buss, the former chief financial officer of SolarCity Corp. and Cypress Semiconductor Corp., will serve as chairman, TuSimple said.
Mr. Buss said Monday — in an email to TuSimple staff that was reviewed by the Journal — that the company would continue to work toward its goal of having commercial self-driving trucks on U.S. highways. “We must continue to make the difficult decisions necessary to keep TuSimple on its trajectory toward long-term success and long-term stability,” Mr. Buss said.
TuSimple said it will release its third-quarter earnings on Monday after the market closes. The earnings release was tentatively scheduled for Tuesday. The company, ahead of the results, said it remained on track to meet full-year guidance released in August, including ending the year with a cash balance of about $950 million.
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