Shares of TuSimple Holdings 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.
San Diego-based 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, a startup working on autonomous trucks mostly in China.
In connection with the evaluation of Hydron as potential original equipment manufacturer, the company had shared confidential information with Hydron 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.
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 the confidential information shared with Hydron.