TuSimple Holdings on Monday fired co-founder Xiaoji Hou as chairman, CEO and chief technology officer amid federal investigations and an internal investigation into the company’s relationship with China.
An ongoing investigation led by the audit committee of TuSimple’s board of directors has revealed the need for change at the top of TuSimple’s management. statement. Howe was also suspended as a member of the government’s security committee.
The Wall Street Journal reported on Sunday that the FBI, the Securities and Exchange Commission and the Committee on Foreign Investment in the US (CFIUS) are investigating TuSimple for sharing its US intellectual property with the Chinese-backed company co-founded by Hou. , Mo Chen.
TuSimple shares a crater
The news led to a sharp selloff in TuSimple shares (NASDAQ: TSP), which has already decreased by 83% this year. Shares were trading at $3.35 during midday trading on Monday, down $2.96 or 46.91%.
CFIUS investigated TuSimple before the company went public in April 2021. He found no violations. But two board members backed by Chinese tech conglomerate Sina Corp. left TuSimple’s board of directors after the investigation was completed. TuSimple also agreed to limit federal oversight of its business as part of the settlement.
Sina divested some of its 20% stake at the time TuSimple went public.
Humer becomes interim executive director and president
Ersin Humer, executive vice president of operations, will serve as CEO and president while Russell Reynolds Associates conducts an executive search. Lead independent director Brad Bass will serve as chairman of TuSimple. The board of directors is looking to add new independent members following the departure of two Sina-affiliated board members.
“Transparency, discretion and accountability are critical values for our company,” Bass said. “We take these values very seriously.”
Coincidentally, Howe said much the same thing in a Sept. 15 Q&A with Morgan Stanley analyst Ravi Shankar during the investment firm’s 10th annual Laguna conference.
“We’re very honest with ourselves and the world,” Howe said. “It sets us apart as a unique company.”
Humer, who came to TuSimple from rival Aurora Technology, has quickly risen through the tech ranks since joining the company 15 months ago. Like Howe, he holds a Ph.D. focused on product design and development.
Humer’s rise coincided with the departure earlier this year of CEO Cheng Lu and CFO Pat Dillon, who led TuSimple to go public through an initial public offering.
“It’s not uncommon for a CFO to leave shortly after their CEO,” Humer told FreightWaves in a recent interview. “Our view is that this is not uncommon for companies that are startups and then go public. This transition changes the focus for the people who actually got the company there.”
Federal investigations reportedly raise concerns again about TuSimple’s dealings with China
The U.S. assumes limited oversight of TuSimple as the foreign investment investigation is concludedAnalysis: The normally transparent TuSimple is hampering management change, troubling investors