TuSimple has fired its CEO Xiaodi Hou amid an investigation

TuSimple has fired its CEO Xiaodi Hou amid an investigation
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Your Simple Holdings Inc.,

TSP -45.88%

A self-driving trucking company, on Monday said it has fired its chief executive 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 included Mr. Howe, who was also chairman of the board and chief technology officer.

Mr. Howe was suspended pending an ongoing investigation by board members, the statement said. The review “led the board to conclude that a change in chief executive officer was necessary,” the company said in the release.

Securities filings said the board’s investigation found that TuSimple shared confidential information this year with Hydron Inc., a trucking startup that operates mostly in China and is funded by Chinese investors. The filing also states that TuSimple’s decision to share confidential information was not previously disclosed to the board TuSimple entered into a business agreement with Hydron.

TuSimple said it is not known whether Hydron shared the confidential information, or made it public, the securities filing said.

Messrs. How and Chen did not immediately respond to a request for comment.

Mr. Howe’s resignation was announced a day after The Wall Street Journal reported that TuSimple and its leadership, mainly Mr. Howe, faced investigations by the Federal Bureau of Investigation, the Securities and Exchange Commission and the Committee on Foreign Investment in the United States, known as Cfius, over allegations that the company had improperly financed and has transferred the technology to a Chinese startup, according to people with knowledge of the matter.

TuSimple’s stock fell more than 44% on Monday. Shares of the company 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, a China-backed startup founded in 2021 by TuSimple’s co-founder Mo Chen, that it was developing autonomously. Hydrogen powered trucks, Journal reports. Federal investigators are also investigating whether TuSimple shared hydron intellectual property developed in the U.S. and whether that action defrauded TuSimple investors by sending valuable technology to a foreign counterparty.

The Journal also reported that in July the Board Dr Start investigating similar problems, including whether TuSimple incubated Hydron in China without informing regulators, the TuSimple board or its shareholders, other people familiar with the matter said. A June business presentation from Hydron Journal named TuSimple as Hydron’s first customer and said TuSimple would buy hundreds of hydrogen-powered trucks equipped with self-driving technology from Hydron. A TuSimple spokesperson said the company has considered a deal to buy freight trucks from Hydron but is not a Hydron customer.

TuSimple’s securities filing on Monday said the TuSimple employees who worked for and were paid by Hydron earned less than $300,000. The board was not aware of the matter nor did the members approve it, the filing said. Mr. Chen, who founded and leads Hydron, is TuSimple’s largest shareholder, owning about 11.8% of the company, according to FactSet.

Mr. Howe’s dismissal follows months of turmoil at the company, including the departure of its chief financial officer and chief legal officer and a sharp decline in its stock price. Much of the turmoil began when Mr. Howe took over as CEO in March, former employees said.

In April, an autonomous semi truck from TuSimple crashed on an Arizona freeway. the accident Safety and security issues have been revealed Former employees at TuSimple said leadership fired them, the Journal reported in August.

The company said Ersin Yumer, TuSimple’s executive vice president, will serve as interim CEO while the board searches for Mr. Hou’s successor. Mr. Youmer previously worked on autonomous vehicle technology

Aurora Innovations Inc.,

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which was recently closed. Independent board director Brad Bass, former chief financial officer of SolarCity Corp. and Cypress Semiconductor Corp., will become chairman, TuSimple said.

TuSimple said it will release its third-quarter earnings on Monday after the market closes. The earnings release was earlier scheduled for Tuesday. The company, ahead of the results, said it was on track to meet full-year guidance released in August, including ending the year with a cash balance of about $950 million.

Write to Heather Somerville and Kate O’Keefe

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