Xiaodi Hou, the co-founder and former CEO of self-driving truck startup TuSimple, is demanding that the board immediately liquidate the company and return all remaining funds – roughly $450 million – to shareholders “on a pure pro-rata basis, regardless of share class,” according to a letter that TechCrunch has viewed. 

Hou is also suing TuSimple and his former co-founder Mo Chen, the company’s chief producer and director, to confirm that a 2022 voting agreement granting Chen control over TuSimple expired in November 2024, which Hou says would revert his voting rights back to him.

Hou has even created a website, SaveTuSimple.com, to raise awareness about his campaign to liquidate TuSimple and return cash to shareholders – which include Traton Group, Blackrock, and Vanguard. The site states that as of November 26, TuSimple’s stock trades at $0.24 per share, while holding $1.93 per share in cash alone. It advertises that through liquidation, TuSimple shareholders “can immediately realize this 700%+ premium to current market price.”

The letter, lawsuit, and campaign are the latest flareups in an ongoing fight between TuSimple and some of its shareholders, which includes Hou, over the company’s attempts to send its remaining assets to China. Before shuttering its U.S. operations and delisting from the stock market earlier this year, TuSimple was a pre-revenue company, so any cash it has today would have come from investors. 

Hou and other shareholders have accused TuSimple’s leaders of diverting assets towards animation and gaming businesses linked to Chen, framing it as a business pivot. After shareholders raised concerns of self-dealing in an August letter to the board, TuSimple surprised many by unveiling a new AI-generated animation and gaming unit.

Earlier this month, Hou urged a California district court to issue a temporary restraining order on TuSimple to stop the company from transferring U.S. assets to China as part of an existing shareholder lawsuit. Hou said he was galvanized to action after noticing filings that he says signaled TuSimple was preparing to transfer large sums of money to China. 

TuSimple has fought back against Hou, bringing up its own litigation alleging trade secrets theft after Hou launched his autonomous trucking startup, Bot Auto, in Texas last month.

“As a founder who invested seven years building TuSimple Holdings Inc. and its largest shareholder, it has been disappointing to watch shareholders’ collective investment value plummet by over 91% in less than two years under the leadership of Mo Chen…and Chairman and CEO Cheng Lu,” Hou wrote in the letter which he sent to the board on Monday.

Hou filed suit against TuSimple and Chen last week in the Delaware Chancery Court, which is known to be friendly to shareholder rights. In the filing, he also asked the court to postpone TuSimple’s upcoming annual shareholder meeting, which is currently scheduled for December 20, to “prevent the implementation of proposed significant governance changes before the voting rights dispute is resolved.”

Sources familiar with the matter say Hou wants time to solicit proxies to get more investors on side. 

Aside from Hou and Chen, TuSimple’s largest shareholder with an 11.8% stake is Sun Dream, an affiliate of Chinese conglomerate Sina Corporation, an investment that brought scrutiny from federal regulators. 

The remaining large shareholders are: Logistics giant Traton (7.6% stake); Vanguard Group (6.1% stake); BlackRock (5.6% stake); and Camac Partners (5.5% stake). Camac has also written to urge the board to keep TuSimple’s funds in the U.S. The other three investors did not respond in time to TechCrunch to comment. 

But before Hou can convince shareholders to back him, he’ll need to get control over his own shares, which are the subject of his lawsuit. 

In the fall of 2022, a probe from the Committee on Foreign Investment in the United States led TuSimple to reveal that its employees spent paid hours in 2021 working for Hydron – Chen’s hydrogen trucking startup based in China – and shared confidential information with the company. As a result, Hou was ousted from his posts as CEO, president, and CTO, and from his position as chairman of the board, though he retained a seat on the board. Hou has maintained that the firing was done without just cause. 

He and Chen were concerned that the board was engaged in a power grab that wasn’t in TuSimple’s best interest, so they discussed combining their voting powers to reinstate Chen on the board and bring Hou back as CTO after an internal investigation about the Hydron allegations. (Hou never got his CTO post back.)

On November 9, Hou signed an agreement with Chen that would give the latter “irrevocable proxy and power of attorney” over Hou’s shares in TuSimple: Around 13.4 million shares of Class A common stock, and 12 million shares of Class B common stock. Put together, Hou’s shares would account for 29.7% of TuSimple’s total voting power. 

The agreement, which TechCrunch has viewed, expired after two years. Hou says this means the shares should revert back to him. But Chen has other ideas. 

In a Securities and Exchange Commission filing dated November 9, 2024, Chen reaffirmed his claim to Hou’s shares, stating that he controls 57.9% of the company’s voting power. The filing also states that while the irrevocable proxy indeed terminated, “the voting agreement, and the voting arrangement thereunder, remain in full force and effect.” In other words, while Hou may be in possession of the shares, he still needs to vote as Chen directs. 

(It’s worth noting that since voluntarily delisting from the stock market in January, TuSimple has failed to file quarterly updates, which are required for a company that is still registered with the SEC. TuSimple is also attempting to deregister from the SEC.) 

TuSimple included similar language around the deal with Hou in its proxy statement to shareholders ahead of the upcoming annual meeting, during which they will vote on renewing the six current directors and whether to create a classified board, or a staggered board. 

Half of the board’s current makeup is TuSimple executives: Chen, TuSimple CEO Cheng Lu, and TuSimple COO Jianan Hao. The other three – James Lu, Zhen Tao, and Albert Schultz – are meant to be independent directors.

If the second proposal were to pass, it would prevent shareholders from replacing the entire board in a single vote and it could entrench control with Chen, who would effectively be ensuring his preferred directors stay in place for the long term. 

A hearing to expedite the review of Hou’s complaint and to decide on his request to postpone TuSimple’s annual meeting is scheduled for December 2.

TuSimple did not respond to TechCrunch’s request for comment.