Source: Cheng Lu to return as CEO at TuSimple

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Cheng Lu, ousted as CEO of autonomous truck developer TuSimple in an unannounced succession plan in March, will return to his former role following the board of directors’ firing of co-founder Xiaodi Hou on Oct. 30, according to a knowledgeable source.

TuSimple was expected to make the announcement late Thursday. A company spokesperson did not immediately return a call for comment. Lu declined to comment.

Restoring Lu, a former investment banker who led the company public with former CFO Pat Dillon in April 2021, is an attempt to stabilize the company. Practically the entire leadership team departed before and after Hou assumed the roles of CEO and chairman.

“We’re already actively recruiting,” TuSimple Chairman Brad Buss told analysts on the company’s third-quarter earnings call Nov. 1. “The key is there’s not a big disagreement on strategy. That’s the biggest thing that sends companies sideways. We’re very aligned. So it’s really just getting a couple of people in place and away we go. We’re hoping to have things wrapped up very quickly.”

TuSimple shares fell 47% on Oct. 31, the day Hou’s firing was announced. The company gained 18.94% Thursday to close at $2.70, far off its 52-week high of $43.79.

Other co-founder returns as TuSimple chairman

Mo Chen, the company’s other co-founder, is returning as chairman, the source told FreightWaves. That comes despite Chen being a major player in a China-backed startup that contributed to the board’s sacking of Hou.

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TuSimple said in a Securities and Exchange Commission filing Monday that it reached out to the SEC and the Committee on Foreign Investment in the United States (CFIUS) after its parting with Hou. The board said Hou exercised poor judgment and violated company disclosure rules in working with Chen’s hydrogen trucking startup, Hydron Inc.

TuSimple employees contributing less than $300,000 in labor to Hydron in 2021 needed to be disclosed to the SEC, the company said. The agency and CFIUS are both investigating TuSimple.

The company said it is unaware of an FBI investigation and, “to date,” has not been contacted. An Oct. 30 story in The Wall Street Journal said the SEC, CFIUS and FBI were investigating TuSimple and its relationship with Chen and Hydron.

TuSimple cooperating with SEC, CFIUS

“The company has cooperated, and will continue to cooperate, with such inquiries,” TuSimple said in its filing Monday. “In connection with the filing of the Form 8-K, the company proactively reached out to CFIUS and is responding to requests from CFIUS for additional information about the subject of the Form 8-K.”

Hou and Chen remain TuSimple’s largest shareholders and their class of voting shares, which counts 10 votes for every common share, accounts for about 68% of the voting shares. Chen stepped down as a board member in March. Hou retained his board seat despite being removed as chairman when he was stripped of the CEO title.

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