TuSimple co-founder resigns, accused of poaching staff for new venture

by Ana Lopez

TuSimple co-founder Xiaodi Hou resigned from the company’s board of directors last week amid an internal investigation that sought to verify claims that Hou approached TuSimple employees about leaving the company to join his new venture connect one by one SEC filing.

Sources familiar with the matter told businessupdates.org that a “whistleblower” informed upper management about Hou’s requests from employees over the past few months to join a company he was starting. Hou allegedly pressured certain employees to stop working so hard, either because they would soon join his new venture or because he wanted to see the autonomous transport company fail without him, the sources say.

TuSimple launched an internal investigation, which confirmed that at least two employees – top talent in “high-tech” teams – had been approached by Hou, but the co-founder resigned from the board before TuSimple could complete the investigation.

TuSimple has not yet decided whether it will proceed with the investigation, but if it does, it will be to determine whether other employees have been compromised, according to a source familiar with the matter.

Portrait photo of Xiaodi Hou, co-founder of TuSimple. Image credit: TuEasy

Hou did not respond to businessupdates.org’s requests for comment, but the co-founder can certainly be accused of having an ax to sharpen. In November, TuSimple’s board of directors fired Hou from its CEO, president, and CTO posts following the board’s discovery that TuSimple had transferred confidential information to Hydron, a hydrogen-powered trucking startup led by TuSimple co-workers. founder and controlling shareholder Mo Chen and backed by Chinese investors. .

At the time, Hou said he was removed “for no reason” and called the board’s processes and conclusions “questionable at best”.

“As the facts come to light, I am confident that my decisions as CEO and Chairman, and our vision for TuSimple, will be confirmed,” Hou said in a statement. LinkedIn message in November.

TuSimple’s board had conducted its own investigation following an investigation by the Committee on Foreign Investment in the US (CFIUS). CFIUS assesses foreign investment for national security concerns and may impose safeguards and recommend to the president that certain investments be blocked. The Biden administration is actively working to prevent US technology from increasing China’s military power, including the use of autonomous vehicles.

That investigation is ongoing and has led to possible criminal charges. Last month representatives who are part of the CFIUS review panel urged the Department of Justice to consider economic espionage charges against Hou and Chen and against current CEO Cheng Lu.

Lu previously served as CEO of TuSimple from September 2020 to March 2022 before being ousted. He returned to the helm in November. At the same time, four independent directors were removed from the board of directors and Chen was appointed executive chairman of the board of directors.

While TuSimple likely hopes Hou’s resignation will help the company close its chapter on national security investigations, TuSimple has other concerns on its plate. Earlier this month, the company made received a non-compliance warning from the Nasdaq for failing to timely file fourth-quarter and full-year 2022 financial results. TuSimple is still hiring a new auditor after KPMG resigned over the company’s risk factor, sources say. The company hopes to report results by May, the deadline the Nasdaq has set to return to compliance.

Related Posts