TuSimple drama heats up ahead of key shareholder meeting

TuSimple founder and former CEO Xiaodi Hou is on the warpath ahead of Friday’s annual shareholder meeting that will determine the composition of the company’s board of directors.

A few weeks ago, Hou sued TuSimple for controlling his voting rights, demanded the company immediately liquidate and return all remaining funds to shareholders, and urged the courts to block TuSimple’s ability to transfer money to China.

Now, Hou is pushing shareholders to change the board, even if that means taking the fight out of the annual meeting. On Monday, Hou wrote an open letter to shareholders informing them of his plans to introduce a written consent order to remove existing board directors and replace them with those who will support the sale. This means that even if the six existing board directors are re-elected at the next annual meeting, shareholders who want to see a change will have the option to try again.

TuSimple, meanwhile, has asked shareholders ahead of the annual meeting to re-elect its current directors and approve a board shake-up plan. This second proposal, if approved, would block any future attempts to remove all board members at once.

TuSimple did not immediately respond to TechCrunch for comment.

Hou is pushing for a written consent request because it would allow shareholders to remove directors outside of the annual meeting cycle with the support of a majority of the remaining voting power, he said in the letter.

TuSimple has been in the game since the private trucking company went public in 2021. This latest chapter began after it closed its operations in the US and was delisted from the stock market in early 2024. TuSimple said it plans to relaunch AV testing in China. , but instead parted ways with the majority of the self-driving group earlier this year. Now, it appears that TuSimple is willing to use its US funds – investor money that the previous revenue business received after it was delisted – to fund a new business unit in animation and AI games. And shareholders like Hou are not happy about it.

“I am writing to you today not just as an investor, but as a founder who has spent seven years of passion, energy, and personal commitment to making TuSimple a world leader in autonomous driving,” Hou wrote in his letter to shareholders. “The sad thing is that under the management of the company and the board of directors, the opportunity to achieve that vision is rapidly disappearing. Given the extensive list of issues at TuSimple under the current leadership team…I believe the liquidation, which could return $1.93 per share (or more) to shareholders, represents an equitable way forward for all of us.”

Shares of TuSimple were trading at $0.40 on Monday in the over-the-counter securities market. Hou’s estimate of a return of about $2 per share is based on a previous report from TechCrunch that found TuSimple had about $450 million in cash left in the US as of September.

Hou was ousted from his post in 2022 and resigned from the board in 2023 following allegations that he was trying to poach workers for a new job. Hou still maintains that he was fired without reason. He also said that he resigned from the board complaining about the high salary of his successor due to the layoffs of many people in the company.

In late November, Hou sued TuSimple and Mo Chen, the company’s founder, executive producer, and director, to regain control of his voting rights. Hou pointed out that the 2022 voting agreement giving Chen control over his Class B shares expired in 2024, thereby returning his voting rights to him.

TuSimple and Chen charged that although Hou may own shares now, he still needs to vote as Chen directs.

The dispute over Hou’s 27.9% stake will not be resolved until the first quarter of 2025, when a hearing is scheduled.