Investing

Autonomous Truck Maker TuSimple Fires Founder and CEO Hou, Shares collapse

Greg Morcroft

Published: November 1, 2022 8:02 pm

On Monday, self-driving truck maker TuSimple Holdings (US:TSP) said it fired its co-founder and Chief Executive Xiaodi Hou. Hou was also the board chairman and chief technology officer.

A board probe concluded that “a change of Chief Executive Officer was necessary,” the company said in a news release on Monday.

The firing follows a Wall Street Journal Report citing people familiar with the matter that several federal regulatory agencies are investigating the company. The report claimed the probes concern whether or not TuSimple wrongly financed and transferred technology to a Chinese startup.

In a Monday filing with the US Securities & Exchange Commission, the San Diego-based company said its board determined that the company did share confidential data with Chinese trucking startup Hydron without the board’s knowledge.

TuSimple shares fell 47% to $3.38 at midday after hitting a 52-week low of $3.31 earlier Monday.

Regulators are probing if Hou violated fiduciary duties and securities laws when he failed to disclose information about Hydron.

TuSimple’s investigation revealed that its employees worked for Hydron and were paid, unbeknown to the board. It also discovered that Hydron’s founder owns about 12% of TuSimple.

Since Hou took the company reins in March, several top executives left, and the stock went into free fall.

Mr. Hou’s dismissal follows months of upheaval at the company. It has seen an exodus of staff, including its chief financial officer and chief legal officer, and a plummeting stock price. Much of the turmoil began when Mr. Hou took over as CEO in March, said, former employees.

Ersin Yumer, TuSimple’s executive vice president of operations, will be interim CEO while the board finds a permanent replacement.

Yumer previously worked at Aurora Innovation, Uber, and Argo AI, the recently closed autonomous-driving venture including Ford and Volkswagen that was recently shut down. Independent board director Brad Buss is the new chairman.

This article originally appeared on Fintel