Xiaodi Hou, the co-founder and former CEO of self-driving trucking startup TuSimple, has urged a California district court docket to situation a brief restraining order to cease the corporate from transferring its remaining U.S. belongings to China, in keeping with a latest court docket submitting.
Hou, who plans to use for a brief restraining order in December through the subsequent scheduled court docket listening to, is hoping to maintain TuSimple from shifting tens of hundreds of thousands of {dollars} in money to China. As of September, TuSimple had roughly $450 million in capital. Hou can be requesting expedited discovery of proof to help his requests for the movement.
Hou’s declaration to the court docket, filed on Monday, is the newest escalation within the battle between TuSimple and a few of its shareholders, over the corporate’s makes an attempt to make use of investor capital to fund a brand new AI-generated animation and online game enterprise in China.
That is the primary time Hou — who was ousted from his function as CEO in 2022 — has publicly accused TuSimple and its leaders of funneling belongings towards animation and gaming companies owned by or with direct ties to Mo Chen, TuSimple co-founder and chairman of the board, below the guise of a enterprise pivot. Hou additionally argued the corporate violated SEC laws by neither informing nor gaining approval from shareholders earlier than altering its enterprise path or transferring funds to China.
Hou now heads Bot Auto, a new autonomous trucking startup in Texas
TuSimple, as soon as valued at $8.5 billion after its 2021 IPO, confronted setbacks that led to its U.S. shutdown and delisting in January 2024. The corporate’s acknowledged aim was to commercialize its AV expertise in China. However because the 12 months progressed, TuSimple slashed its workforce, ceased self-driving operations, and started hiring workers to deal with jobs associated to AI gaming and animation.
Shareholders despatched a letter to the board in August after studying TuSimple was placing sources towards AI gaming and animation. The board responded a pair weeks later by publicly saying the brand new enterprise unit.
Hou this week urged the court docket to situation a brief restraining order after noticing a submitting by TuSimple China that signaled the corporate was about to switch cash (or already had) out of the US. Two TuSimple China subsidiaries final week registered a rise in belongings collectively price $150 million, in keeping with Hou’s declaration and data from public filings.
“These filings present a suspicious enhance in registered belongings between these two subsidiaries in in the future as a precursor to giant amount of money switch from U.S. to China,” reads the declaration. “The more than likely situation is that these filings in China had been the preparatory steps earlier than TuSimple U.S. transfers cash to these subsidiaries in China.”
Hou added that such giant money transfers are “past regular course of enterprise” and corresponding to “TuSimple China’s heyday of operation when it was working a big autonomous truck fleet in Shanghai” and had round 700 staff on its payroll. As of September, TuSimple China had round 200 staff.
The window of alternative for shareholders like Hou to get what they need — which is for TuSimple to liquidate to allow them to recuperate a few of their losses — is narrowing.
TuSimple is in a grey space with regards to enforcement from the Securities and Change Fee. Whereas TuSimple delisted earlier this 12 months, the corporate continues to be registered with the SEC and thus topic to U.S. scrutiny. As soon as the cash goes to China, shareholders within the U.S. can have no recourse to claw again funds from their unique funding.
TechCrunch has reached out to the SEC to study if the company is investigating TuSimple in relation to shareholder complaints.
Cheng Lu, CEO of TuSimple, didn’t reply to TechCrunch’s request for clarification relating to the potential switch of roughly $150 million from the U.S. to China. The manager instructed TechCrunch that Hou’s restraining order request is a “determined retaliation” in opposition to TuSimple’s present litigation in opposition to Bot Auto. In October, TuSimple filed go well with in opposition to Bot Auto, alleging commerce secrets and techniques misappropriation.
“The fact is [Xiaodi Hou] is a disgraced CEO that has been making an attempt to disrupt the corporate from shifting ahead for the previous two years in the past, and making an attempt onerous to bankrupt the corporate in order that he can get away with stealing our commerce secrets and techniques to start out a competing enterprise,” Lu instructed TechCrunch.
TuSimple had requested its personal short-term injunction and restraining order in opposition to Bot Auto. A Texas court docket seems able to deny these purposes as a result of TuSimple has been unable to again up its claims, in keeping with a proposed order.
This story was up to date to incorporate remark from TuSimple.
