YourSimple Holdings Inc.,
a self-driving truck company, said on Monday that it had 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 had removed Hou, who was also chairman of the board and chief technology officer.
Mister. Hou was fired in connection with an ongoing investigation by board members, according to the statement.
“Fundamentally, we lost confidence in Dr. Hou’s judgment, decision-making and ability to lead the company as CEO,” TuSimple’s independent board of directors said in a statement.
The securities filing said the board’s investigation found that TuSimple this year shared sensitive information with Hydron Inc., a trucking company with operations primarily in China and funded by Chinese investors. The filing also said that TuSimple’s decision to share the confidential information with Hydron had not been disclosed to the board before. TuSimple signed a deal with Hydron.
TuSimple said it did not know if Hydron publicly shared or disclosed the confidential information.
In a statement posted on LinkedIn, Mister. Hou claimed his innocence and said his dismissal was “without cause.”
“Unfortunately, the Board’s processes and conclusions have been questionable at best,” Mr. How wrote. “As the facts come to light, I am confident that my decisions as CEO and President, and our vision for TuSimple, will be vindicated.”
Mister. Hou’s firing was announced the day after The Wall Street Journal reported that TuSimple and its leadership, primarily Mr. Hou, faced investigations from the Federal Bureau of Investigation, the Securities and Exchange Commission, and Committee on Foreign Investment in the US, known as Cfiusover whether the company improperly financed and transferred technology to Hydron, according to people with knowledge of the matter.
TuSimple shares fell more than 45% in trading on Monday. 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 China-backed startup founded in 2021 by TuSimple co-founder Mo. Chen, who says he is developing autonomous trucks powered by hydrogen, the Journal reported. Federal investigators are also investigating whether TuSimple shared U.S.-developed intellectual property with Hydron and whether that action defrauded TuSimple investors by shipping valuable technology to an adversary abroad.
Mister. Chen did not immediately respond to a request for comment.
El Diario has also reported that the board in July began to investigate similar problems, including whether TuSimple incubated Hydron in China without informing regulators, TuSimple’s board or its shareholders. A June Hydron trade presentation seen by the Journal named TuSimple as Hydron’s first customer and said TuSimple would buy from Hydron several hundred hydrogen-powered trucks equipped with autonomous driving technology. A TuSimple spokesman said the company has considered a deal to buy cargo trucks from Hydron, but is not a Hydron customer.
Mister. Hou said in his statement that he fully cooperated with the board and that “I have nothing to hide.”
“I want to make it clear that I fundamentally deny any suggestion of wrongdoing,” said Mr. As Said.
TuSimple’s securities filing on Monday said TuSimple employees worked for Hydron and were paid, earning less than $300,000. The board was not aware of this nor had members approved it, according to the presentation. Mister. Chen, who runs Hydron, is TuSimple’s largest shareholder, owning about 11.8% of the company, according to FactSet.
Mister. Hou said that he has not sold a single share of TuSimple and that he will continue to hold his stake for as long as he can. He owns about 11.3% of the company, according to FactSet.
Mister. Hou’s firing follows months of turmoil at the company, including the departures of his chief financial officer and chief legal officer. Much of the turmoil began when Mr. Hou took over as CEO in March, former employees said.
In April, one of TuSimple’s self-driving semis crashed on an Arizona highway. The accident security issues revealed at TuSimple that former employees said management had fired them, the Journal reported in August.
TuSimple was founded in 2015 and went public in April 2021, raising over $1 billion at a $8.5 billion valuation in the process. The company is developing autonomous driving systems that it intends to integrate into large trucks made by some of the world’s largest truck manufacturers. Its partners include Navistar International Corp. and Traton, a publicly traded company.
subsidiary that manufactures trucks.
TuSimple said Ersin Yumer, the company’s executive vice president of operations, will serve as interim chief executive while the board searches for a successor. Mister. Yumer previously worked at autonomous vehicle technology a
Aurora Innovation Inc.,
Uber Technologies Inc.
and Argo AI, the autonomous driving company partly owned by
ford engine Co.
which was recently closed. The board’s independent director, Brad Buss, formerly the chief financial officer of SolarCity Corp. and Cypress Semiconductor Corp., will serve as chairman, TuSimple said.
Mister. Buss said Monday, in an email to TuSimple staff that was seen by the Journal, that the company would continue to work toward its goal of having self-driving commercial trucks on U.S. roads. “We have to keep making the tough decisions.” necessary for TuSimple to move forward on its path to long-term success and stability,” Mr. Buss said.
TuSimple on Monday also released third-quarter earnings. The company said it had a net loss of $133 million in the quarter, an improvement of about $2.3 million from the prior year period. It had $2.7 million in revenue, up from $1.8 million in the prior year period, and $86 million in research and development costs. TuSimple said Monday that 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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