Xiaodi Hou, co-founder and former CEO of self-driving truck startup TuSimple, is filing a lawsuit in a California district court to block the company from transferring its remaining U.S. assets to China, according to recent court filings. It called for a temporary restraining order to be issued.
Hou, who plans to apply for a temporary restraining order at the next court hearing scheduled for December, is hoping to stop TuSimple from moving tens of millions of dollars in cash to China. As of September, TuSimple had approximately $450 million in capital. Hou is also requesting expedited discovery of evidence that will aid his motion request.
Hou’s declaration, filed in court on Monday, is the latest escalation in the fight between TuSimple and some of its shareholders over TuSimple’s attempts to use investor capital to fund new AI-based animation and video game businesses in China. no see.
This is the first time that Hou, who was ousted from the CEO position in 2022, has publicly criticized TuSimple and its leaders for pouring assets into animation and gaming businesses owned by or directly related to TuSimple co-founder and chairman Mo Chen. . A boardroom disguised as a business pivot. Hou also alleged that the company violated SEC regulations by failing to notify or obtain approval from shareholders before changing its business direction or moving funds to China.
Hou now leads a new self-driving truck startup in Texas.
TuSimple was once valued at $8.5 billion following its 2021 IPO, but has faced setbacks in the U.S. that led to its closure and delisting in January 2024. The company’s stated goal was to commercialize AV technology in China. But as the years went by, TuSimple cut its workforce, shut down its self-driving operations, and began hiring employees to handle tasks related to AI gaming and animation.
Shareholders sent a letter to the board in August after learning that TuSimple was investing resources into AI gaming and animation. The board announced the new division publicly a few weeks later.
This week, Hou urged the court to issue a temporary restraining order after noticing that TuSimple China had filed signals that the company was planning to transfer funds out of the United States or had already done so. Last week, two TuSimple China subsidiaries registered asset increases worth a total of $150 million, according to Hou’s declaration and public filing information.
“These documents demonstrate a suspicious increase in registered assets between the two subsidiaries in a single day, presaging the transfer of large sums of cash from the United States to China,” the declaration reads. “The most likely scenario is that these filings in China were a preparatory step before TuSimple US transferred money to its subsidiary in China.”
Hou said such large cash transfers were “beyond the normal course of business” and were similar to “TuSimple China’s heyday when it operated a large fleet of autonomous trucks in Shanghai” and had about 700 employees on its payroll, adding. As of September, TuSimple China had about 200 employees.
The window of opportunity for shareholders like Hou to get what they want (TuSimple could liquidate and recoup some of its losses) is narrowing.
TuSimple is in a gray area when it comes to enforcement by the Securities and Exchange Commission. TuSimple was delisted earlier this year but is still registered with the SEC and under investigation in the US. Once the money moves to China, U.S. shareholders will have no recourse to withdraw their money from their original investment.
TechCrunch reached out to the SEC to find out if the agency is investigating TuSimple in connection with the shareholder complaints.
TuSimple did not immediately respond to TechCrunch’s request for comment.
