TuSimple Co-founder Mo Chen Takes Charge As Regulators Probed Related Party Transaction Concerning His Hydrogen Trucking Startup

TuSimple Co-founder Mo Chen Takes Charge As Regulators Probed Related Party Transaction Concerning His Hydrogen Trucking Startup
  • TuSimple Holdings Inc TSP co-founder Mo Chen has taken control of the self-driving trucking company as federal authorities investigated TuSimple’s relationship with Chen’s other startup, a Chinese hydrogen-trucking company.
  • Chen has 59% of the voting power at the San Diego-based company, giving him control as of November 9, a day before the company announced it had ousted its board of directors
  • Chen acquired the stake through stock purchases using his family trust and British Virgin Islands-based entities.
  • TuSimple’s newly appointed CEO, Cheng Lu, said, “We have a strong sense of urgency to put our company back on track and regain trust from all stakeholders,” the Wall Street Journal reports.
  • TuSimple and its leadership faced investigations by the Federal Bureau of Investigation, the SEC, and the Committee on Foreign Investment in the U.S. into whether the company improperly financed and transferred technology to Chen’s recently formed startup, Hydron Inc.
  • TuSimple disclosed that it is now a so-called controlled company that does not require it to comply with some stock-exchange rules.
  • TuSimple said it intended to take all possible corporate-governance exemptions available under Nasdaq Stock Market rules.
  • TuSimple’s board fired CEO Xiaodi Hou in October after a board investigation concluded that TuSimple had shared confidential information with Hydron, Chen’s startup. 
  • Hou, also a co-founder of TuSimple, was its chief technical officer and board chairman.
  • Chen and Hou, both significant shareholders of TuSimple, joined forces to fire the board. 
  • Chen returned as chairman of the board, a position he had held until earlier this year when he largely retreated from his TuSimple responsibilities to focus on Hydron. Lu, TuSimple’s CEO from 2020 to 2022, returned to his old position.
  • Ersin Yumer, the interim CEO who had taken over for Hou, would leave TuSimple this month with a severance of about $340,000.
  • Price Action: TSP shares traded lower by 2.70% at $2.53 in the premarket on the last check Thursday.

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