TuSimple co-founder and former CEO Xiaodi Hou is on a warpath heading into Friday's annual shareholder meeting, which will decide the composition of the company's board of directors.
Over the past few weeks, Mr. Hou has sued TuSimple over voting control, demanding that the company immediately liquidate and return all remaining cash to shareholders and blocking TuSimple from transferring funds to China. asked the court.
Now Mr. Hou is pushing shareholders to change the board, even if it means fighting outside the annual general meeting. Mr Hou sent an open letter to shareholders on Monday warning of plans to begin a written consent process to remove current directors and replace them with directors who support liquidation. This means that even if the six incumbent directors are re-elected at the next annual general meeting, shareholders who want change will still have the option of re-election.
Meanwhile, ahead of the annual general meeting, TuSimple asked shareholders to re-elect existing directors and approve a board diversification plan. If approved, this second proposal would prevent future attempts to remove all directors at once.
TuSimple did not respond to TechCrunch for comment.
Hou's request for written consent allows shareholders to remove directors outside the annual general meeting cycle with the support of a majority of outstanding votes, he argued in the letter. .
TuSimple has been embroiled in drama since the self-driving truck company went public in 2021. This latest chapter began after the startup closed its U.S. operations and delisted from the stock market in early 2024. TuSimple said it planned to resume AV testing in China, but instead parted ways with most of its self-driving team earlier this year. Now, TuSimple appears to be looking to use U.S. funds (the investor cash it acquired after its high-cost, pre-profitable business was delisted) to fund a new business unit in AI animation and games. And shareholders like Hou aren't happy about that.
“I write to you today not just as an investor, but as a co-founder who has poured seven years of passion, energy, and personal commitment into making TuSimple the world leader in self-driving.” said Hou in a letter to shareholders. “Unfortunately, under our current management and board of directors, our chances of achieving that vision are rapidly disappearing, given the extensive list of issues that TuSimple has under current management.” We believe, then, that a liquidation that would return $1.93 per share (or more) to shareholders is the fairest path forward for all of us.”
TuSimple's stock was trading at $0.40 on the over-the-counter market Monday. Hou's estimate of a profit of nearly $2 per share is based on TechCrunch's previous reporting that found TuSimple had about $450 million in cash remaining in the U.S. as of September.
Mr. Hou was forced out of his executive position in 2022 and resigned from the board in 2023 after being accused of trying to poach staff for new ventures. Hou claims he was fired without just cause. He also said he resigned from the board in protest of his successor's high salary amid mass layoffs at the company.
In late November, Hou filed a lawsuit against TuSimple and the company's co-founder, chief producer and director Mo Chen, seeking to regain control of his voting rights. Mr. Hou argued that the 2022 voting rights agreement that gave Mr. Chen control of the Class B shares would expire in 2024 and the voting rights would be returned to Mr. Chen.
TuSimple and Chen argued that although Mr. Hou may currently own the shares, he must vote according to Mr. Chen's instructions.
The dispute over Hou's 27.9% stake will not be resolved until the first quarter of 2025, when a public hearing is scheduled.