TuSimple co-founder and former CEO Xiaodi Hou is on a conflict path within the lead as much as Friday’s annual shareholder assembly that can resolve the make-up of the corporate’s board of administrators.
Over the previous a number of weeks, Hou has sued TuSimple for management of his voting rights, demanded the corporate instantly liquidate and return all remaining money to shareholders, and urged courts to dam TuSimple’s capacity to switch funds to China.
Now, Hou is pushing shareholders to alter the board, even when meaning taking the combat exterior the annual assembly. On Monday, Hou wrote an open letter to stockholders alerting them to his plans to launch a written consent course of to take away the present board administrators and substitute them with ones who will assist liquidation. Which means that even when the six incumbent board administrators are re-elected on the upcoming annual assembly, shareholders who wish to see change may have the choice to attempt once more.
TuSimple, in the meantime, has requested shareholders forward of the annual assembly to re-elect its current administrators in addition to approve a plan to stagger the board. This second proposal, if permitted, would block any future makes an attempt at eradicating all board members directly.
TuSimple didn’t reply in time to TechCrunch to remark.
Hou is pushing for a written consent solicitation as a result of it could enable shareholders to take away administrators exterior the annual assembly cycle with the assist of a majority of the excellent voting energy, he argued within the letter.
TuSimple has been embroiled in drama because the autonomous trucking firm went public in 2021. This newest chapter started after the startup shut down its U.S. operations and delisted from the inventory market initially of 2024. TuSimple stated it deliberate to relaunch AV testing in China, however as an alternative it parted methods with many of the self-driving group earlier this yr. Now, it seems TuSimple is angling to make use of its U.S. funds — investor money that the pre-revenue, high-cost enterprise acquired as soon as it delisted — to pay for a brand new enterprise unit in AI animation and gaming. And shareholders like Hou will not be completely satisfied about it.
“I write to you immediately not simply as an investor, however as a co-founder who has poured seven years of ardour, vitality, and private dedication into making TuSimple a world chief in autonomous driving,” Hou wrote in his letter to shareholders. “Sadly, below the corporate’s present administration and board of administrators, the prospect of reaching that imaginative and prescient is fading quick. Given the in depth record of points at TuSimple below the present management group…I imagine liquidation, which might return $1.93 per share (or extra) to stockholders, represents probably the most equitable path ahead for all of us.”
TuSimple’s inventory was buying and selling Monday on the over-the-counter securities market at $0.40. Hou’s estimation of a virtually $2 return per share relies on earlier reporting from TechCrunch that discovered TuSimple had roughly $450 million in money remaining within the U.S. as of September.
Hou was ousted from his govt positions in 2022 and resigned from the board in 2023 following accusations that he was making an attempt to poach employees for a brand new enterprise. Hou has maintained he was fired with out simply trigger. He additionally stated he resigned from the board in protest of his successor’s hefty pay bundle amid mass layoffs on the firm.
On the finish of November, Hou sued TuSimple and Mo Chen, the corporate’s co-founder, chief producer, and director, to regain management over his voting rights. Hou has argued {that a} 2022 voting settlement granting Chen management over his Class B shares expired in 2024, thus reverting his voting rights again to him.
TuSimple and Chen have made the case that whereas Hou could also be in possession of the shares now, he nonetheless must vote as Chen directs.
The dispute over Hou’s 27.9% stake received’t be solved till the primary quarter of 2025, when a listening to is scheduled.