Self-driving truck startup TuSimple has fired its CEO, Xiaodi Hou, after the company is being investigated about its relationship with China-backed Hydron, the company said Monday.
An investigation by the FBI, the Securities and Exchange Commission (SEC) and the Committee on Foreign Investment found improper dealings and possible tech transfer by the San Diego based company, the Wall Street Journal reported on Sunday.
According to people familiar with the matter, officials are looking at whether TuSimple and its executives breached securities laws by failing to properly disclose the relationship with Hydron. The board’s investigation began in July.
The San Diego-based company operations chief Ersin Yumer will serve as interim CEO and president, while the board searches for a permanent successor.
Shares of TuSimple were down more than 40% in early trading following the news.
TuSimple said in a regulatory filing Monday that it believes some of its employees spent paid hours in 2021 working for Hydron, and shared confidential information with the Chinese company that develops hydrogen-powered trucks equipped with autonomous driving technology.
Leadership failed to make required disclosures about its transactions with Hydron and whether the dealings harmed TuSimple investors, according to the report.
Hydron was founded in 2021 by Mo Chen, who also is a co-founder of TuSimple.