TuSimple fires CEO over ties to Chinese firm; exec denies wrongdoing

Truck-trailers are parked at AllianceTexas in Fort Worth

(Reuters) -Shares of TuSimple Holdings Inc nearly halved on Monday after the self-driving truck startup said it had removed Chief Executive Xiaodi Hou in connection with the company’s ties to a China-backed firm.

TuSimple said in a securities filing that an investigation by its board showed some of its employees spent paid hours last year working for Hydron Inc, a startup working on autonomous trucks mostly in China.

The company had also shared confidential information with Hydron, which was being evaluated as a potential original equipment manufacturer, that was not brought to the attention of audit and government security committees, according to TuSimple.

Hou confirmed in a WeChat post that he had been removed as chairman and CEO by TuSimple’s board, but denied any wrongdoing and said the move was “without cause.”

“It is so unfair to let politics get in the way of the dream we were pursuing together,” he said.

Hou’s ouster came after a Wall Street Journal report that TuSimple was being investigated by the FBI, the U.S. Securities and Exchange Commission and the Committee on Foreign Investment (CFIUS) about its relationship with China-backed Hydron.

The FBI, the SEC and the CFIUS did not respond to Reuters’ requests for comment.

Separately, TuSimple reported revenue of $2.7 million for the third quarter ended Sept. 30, up 49% from a year earlier but below analysts’ estimate of $3.2 million, according to Refinitiv data.

The company posted a per-share loss of 50 cents, smaller than the 56-cent loss expected by analysts, pushing its shares about 2% higher to $3.49 in extended trading.

San Diego, California-based TuSimple has named Ersin Yumer, the vice president of operations, as its interim CEO.

The company also said that it had not been able to determine the value of confidential information shared with Hydron.

(Reporting By Kevin Krolicki in Singapore and Akash Sriram in Bengaluru; additional reporting by Deborah Sophia in Bengaluru; editing by Peter Henderson, Chris Reese and Anil D’Silva)