TuSimple is probed by the FBI and the US Securities Exchange Commission (SEC) and Committee on Foreign Investment. It is about its relationship with China-backed Hydron. The officials will be looking at TuSimple and its executives, especially Chief Executive Xiaodi Hou. The investigation will be on whether they breached fiduciary duties and securities laws as they haven’t properly disclosed the relationship with Hydron.
They are also trying to find out whether TuSimple shared intellectual property developed in the United States with Hydron and whether that action defrauded TuSimple investors by sending valuable technology to an overseas adversary, the newspaper said. Launched by TuSimple Co-Founder Mo Chen in June, Hydron is committed to developing, manufacturing, and selling hydrogen-powered trucks equipped with L4 autonomous driving technology, according to its website.
TuSimple’s board opened its own investigation in July, looking into whether the company incubated Hydron in China, including by funding and transferring technology to the startup without informing regulators, the TuSimple board, or its shareholders, WSJ said, citing other people familiar with the matter. A TuSimple spokesman told WSJ that the company isn’t aware of any FBI or SEC investigations and that Hou has never been a Hydron employee or received payment from Hydron. Hou also does not have a financial interest in the company.
TuSimple IPO last year
TuSimple revealed in its IPO prospectus last year that its backer Chinese social media firm Sina Corp investments in TuSimple had been put under review by the Committee on Foreign Investment in the United States (CFIUS). TuSimple, which raised more than $1 billion through an initial public offering (IPO) on Nasdaq last April, said in its annual report that it operates about 100 Level 4 autonomous semi-trucks – 75 in the United States and 25 in China – capable of running without human drivers on certain routes.
The decision to sell the China business was the result of “tight regulations” in China and the United States, said this person, adding the TuSimple business was expected to “grow independently” after resolving the security concerns. The company was hoping to sell the China unit for up to $1 billion and has approached several Chinese investors, including private equity firm Boyu Capital, in its search for potential buyers.
Hydron was started in 2021 by Mo Chen, TuSimple’s co-founder. He incorporated Hydron in China, Hong Kong, and Delaware, according to public filings, with a plan to build hydrogen-powered trucks in North America modeled on a design by a subsidiary of a Chinese state-controlled auto manufacturer. People familiar with the matter said Hydron’s operations are mostly in China, where Mr. Chen spends most of his time. The startup was backed by Chinese investors.
