Xiaodi Hou, co-founder and former CEO of self-driving truck startup TuSimple, urged a California district court docket to challenge a short lived restraining order to stop the corporate from transferring its remaining U.S. property to China, in accordance with a court docket submitting. current.
Hou, who plans to hunt a short lived restraining order in December throughout the subsequent scheduled court docket listening to, hopes to stop TuSimple from transferring tens of tens of millions of {dollars} in money to China. As of September, TuSimple had roughly $450 million in fairness. Hou additionally requests expedited discovery to help in his movement requests.
Hou’s court docket assertion, filed Monday, is the most recent escalation within the Battle between TuSimple and a few of its shareholders.in regards to the firm’s makes an attempt to make use of investor capital to finance a brand new AI-generated online game and animation enterprise in China.
That is the primary time that Hou, who was expelled from his position as CEO in 2022, has publicly accused TuSimple and its leaders of funneling property into animation and gaming firms owned by or with direct ties to Mo Chen, TuSimple’s co-founder and chairman, beneath the guise of a turnaround. enterprise. Hou additionally argued that the corporate violated SEC rules by failing to report or acquire shareholder approval earlier than altering its enterprise tackle or transferring funds to China.
Hou now runs Bot Auto, a new autonomous transportation startup in texas
TuSimple, as soon as valued at $8.5 billion after its IPO 2021confronted setbacks that led to his U.S. shut and delisting in January 2024. The corporate’s acknowledged aim was to commercialize its AV know-how in China. However because the yr progressed, TuSimple minimize its workforce, ceased self-driving operations, and started hiring employees to deal with work associated to gaming and AI animation.
Shareholders despatched a letter to the board in August after studying that TuSimple was pouring sources into AI video games and animation. The board responded a few weeks later by publicly saying the brand new enterprise unit.
This week, Hou urged the court docket to challenge a short lived restraining order after noticing a submitting from TuSimple China that indicated the corporate was about to switch cash (or had already accomplished so) out of america. Two subsidiaries of TuSimple China final week recorded a rise in property price a mixed $150 million, in accordance with Hou’s assertion and knowledge from public paperwork.
“These filings present a suspicious enhance in property recorded between these two subsidiaries in at some point as a precursor to a considerable amount of money transfers from america to China,” the assertion learn. “The probably state of affairs is that these filings in China have been preparatory steps earlier than TuSimple US transferred cash to these subsidiaries in China.”
Hou added that such giant money transfers are “past the traditional course of enterprise” and are akin to “TuSimple China’s heyday of operations when it operated a big fleet of autonomous vehicles 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 so it may recoup a few of its losses, is narrowing.
TuSimple is in a grey space in terms of enforcement by the Securities and Change Fee. Whereas TuSimple delisted earlier this yr, the corporate remains to be registered with the SEC and subsequently topic to US scrutiny. As soon as the cash goes to China, shareholders in america may have no recourse to recuperate funds from their authentic funding.
TechCrunch has reached out to the SEC to search out out if the company is investigating TuSimple in reference to shareholder complaints.
Cheng Lu, CEO of TuSimple, didn’t reply to TechCrunch’s request for clarification in regards to the attainable switch of roughly $150 million from america to China. The manager instructed TechCrunch that Hou’s restraining order request is “determined retaliation” towards TuSimple’s ongoing litigation towards Bot Auto. In October, TuSimple filed a lawsuit towards Bot Auto, alleging misappropriation of commerce secrets and techniques.
“The fact is that (Xiaodi Hou) is a disgraced CEO who has been attempting to cease the corporate from transferring ahead for the final two years, and attempting with all his may to bankrupt it so he can get away with stealing our commerce secrets and techniques to get began. a competing enterprise,” Lu instructed TechCrunch.
TuSimple had filed for its personal momentary injunction and restraining order towards Bot Auto. A Texas court docket seems poised to reject these requests as a result of TuSimple has didn’t help its claims, in accordance with a proposed order.
This story has been up to date to incorporate feedback from TuSimple.
