TuSimple, a San Diego-based self-driving trucking startup, said Monday that it had removed its CEO, Xiaodi Hou, in connection with his suspicious ties to another autonomous trucking firm in China. The revelation has caused the company’s share prices to fall dramatically.
The startup, which in 2021 became the first company to operate a self-driving truck on public roads in America with no humans aboard, said that an investigation launched by its board showed that some of its employees had spent paid hours working for Hydron Inc., a startup working on similar projects, albeit largely in China, reports Reuters.
The investigation revealed that TuSimple had also shared confidential information with Hydron. The company said it has not been able to determine the value of the information leaked to the Chinese startup.
Read: US Postal Service Partners With TuSimple To Test Autonomous Semis
Hydron was being evaluated as a potential original equipment manufacturer by TuSimple, which is also tied to Traton, Navistar, UPS, and the U.S. Postal Service. Hou’s ties to the Chinese startup were not brought to the attention of audit and government security committees during that process, though.
The removal of its CEO came after the Wall Street Journal reported that Hou was being investigated by the FBI, the Securities and Exchange Commission, and the Committee on Foreign Investments due to his connections to Hydron.
In a post on WeChat, Hou confirmed that he had been ousted as chairman and CEO of TuSimple, but denied wrongdoing, claiming that the move had been committed “without cause.”
“It is so unfair to let politics get in the way of the dream we were pursuing together,” wrote Hou.
As a result of the scandal, TuSimple’s share prices fell sharply, as the company lost 50 cents per share. That was, however, smaller than the 56-cent per-share loss expected by analysts.