TuSimple Co-Founder Takes Control of Self-Driving Trucking Company

Mr. Chen didn’t respond to a request for comment. TuSimple’s newly appointed chief executive officer,

Cheng Lu,

said, “We have a strong sense of urgency to put our company back on track and regain trust from all stakeholders.”

The consolidation of power under Mr. Chen is part of a dramatic series of recent events at TuSimple. Its prior chief executive, who was fired by the board of directors, turned around and ousted the board. With these changes, and now Mr. Chen’s controlling stake, TuSimple said it would no longer follow some of the corporate-governance rules that apply to most other companies listed on a U.S. stock exchange.

The leadership and ownership changes follow a report by The Wall Street Journal last month that TuSimple and its leadership faced investigations by the Federal Bureau of Investigation, the SEC and the Committee on Foreign Investment in the U.S.—a national-security panel known as Cfius—into whether the company improperly financed and transferred technology to Mr. Chen’s recently formed startup, Hydron Inc.

Hydron has most of its operations in China and has funding from China. Investigators are looking into whether TuSimple leadership failed to disclose properly its relationship with Hydron and whether it defrauded TuSimple’s investors by sending valuable technology to an overseas adversary, the Journal reported.

TuSimple previously said that it wasn’t aware of any FBI or SEC investigations and that it had explored a partnership with Hydron to buy freight trucks, but had no further financial or business relationship with the startup.

TuSimple said in its filing Wednesday that it is now a so-called controlled company, a designation that means it doesn’t have to comply with some stock-exchange rules including one requiring that the majority of its board be made up of independent directors.

The company said it intended to take all possible corporate-governance exemptions that are available under Nasdaq Stock Market rules.

The company said it still plans to set up an independent audit committee and to replace its security director, whom it fired earlier this month. That security director is a former U.S. national-security official who had been installed as part of an agreement between TuSimple and Cfius, which investigated TuSimple’s China ties last year.

TuSimple shares closed Wednesday at $2.59, a drop of more than 50% from a month earlier. Its 2021 initial public offering price was $40 a share.

TuSimple’s board of directors fired CEO

Xiaodi Hou

in October, after a board investigation concluded that TuSimple had shared confidential information with Hydron, Mr. Chen’s startup. Mr. Hou, also a co-founder of TuSimple, was its chief technical officer and board chairman.

Mr. Hou said in response that his firing was without cause and that he would be vindicated. A spokeswoman for Mr. Hou declined to comment.

Mr. Chen and Mr. Hou, both major shareholders of TuSimple, joined forces to fire the board. Mr. Chen returned as chairman of the board, a position he had held until earlier this year, when he largely retreated from his TuSimple responsibilities to focus on Hydron. Mr. Lu, who was TuSimple’s CEO from 2020 to 2022, returned to his old position.

The company confirmed Wednesday that Ersin Yumer, the interim CEO who had taken over for Mr. Hou, would leave TuSimple this month with a severance of about $340,000.

“The new board put their choice of CEO in place and as a result, at my request, we mutually agreed it would be best for us to go our separate ways,” Mr. Yumer said.

Write to Heather Somerville at [email protected]