Economy

Founder of truck maker Nikola resigns after fraud allegations

Founder of truck maker Nikola resigns after fraud allegations”

"Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me", Mr Milton said. In a letter to employees about his resignation Milton wrote: "I intend to defend myself against the false allegations leveled against me by outside detractors".

Nikola said that former GM Vice Chairman Stephen Girsky, a member of the board, would replace Milton.

Milton has also resigned from the company's board, Nikola said in a statement on Sunday.

It also sparked an investigation by the Securities and Exchange Commission, according to sources cited by Bloomberg.

The zero-emission truckmaker's stock had roughly halved in value since 8 September, when a "short-seller" calling itself Hindenburg Research published a report in which it alleged that Nikola had made multiple false statements around its products and technologies. By late Monday morning, Milton had made his Twitter account private, but his LinkedIn account remained public and active.

Nikola said at the time it had briefed the SEC on concerns pertaining to the report.

"However, clearly there is much wood to chop to get there over the next 12 to 18 months", the analyst added.

Nikola said it contacted the Securities and Exchange Commission, which is looking into Hindenburg's allegations.

More news: Florida State's Mike Norvell contracts COVID-19, won't coach vs

Shares of Hanwha Solutions plunged Monday immediately after electric vehicle developer Nikola announced a leadership shakeup, as it faces a heap of fraud allegations and an upcoming probe.

Nikola had rejected most of the claims in the Hindenburg report. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Nikola's management and are not predictions of actual performance.

Hindenburg's report came soon after Nikola sealed a partnership with GM, which took an 11% stake in the company for about $2 billion and agreed to work together to make electric pickup trucks to take on Tesla Inc TSLA.O .

This summer Nikola had a splashy debut on the stock market in June, thanks in part to its announcement of an electric pick-up truck - a big departure from its focus on semis, but one that was popular with investors. Shares of GM were down more than 6% Monday following the announcement. GM will be the supplier for the fuel cells, provide access to its battery technology and manufacture and engineer the Nikola Badger.

GM CEO Mary Barra said last week that GM has worked with a lot of partners before and a "very, very capable team has done the appropriate dilligence" on the Nikola deal.

Girsky brings an extensive background on Wall Street to the top job at Nikola.

About Stephen Girsky Girsky is a Managing Partner of VectoIQ, LLC, an independent advisory firm based in NY.



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