Nikola founder steps down from the board as the company encounters fraud allegations. The founder of Nikola, Trevon Milton, the executive chairman is leaving the board of directions. After accusations that the zero-emission vehicle initialization deceived investors, the company mentioned on Sunday.
Nikola founder, Trevor Milton is to be replaced by Stephen Girsky (existing board member) who was a former vice-chairman of GM. And will become Chairman of the Board. Following Bloomberg’s reports, the shares of the company went down 22 percent in the pre-market trading of the United States.
Here is what Nikola’s Chief Executive Officer, Mark Russell said:
“We remain committed to delivering on our objectives and creating value for our shareholders”.
The electric truck initialization has been under intensive examination. After a report said that the company had involved barely in “lies and deception”. On the 10th of September. Just briefly after GM mentioned that it would be getting an eleven percent stake in Nikola.
Depreciating from Hindenburg Research announced a report. The report was termed. “Nikola: How to Parlay An Ocean of Lies into a Partnership With the Largest Auto OEM in America”. Hindenburg blamed Nikola for overemphasizing the progress of its technology.
Particularly saying that the company had mounted a video that displayed one of its truck going down a hill.
Nikola said the report was “false and defamatory”
Nikola termed the report as “false and defamatory” and mentioned that is filled with “dozens” of inappropriate statements. The company did not deny the fact that it actually staged the video which displayed the truck going down a hill.
However, it explained the truck as being “in motion” instead of just having to be “under its own propulsion”. It also said that Hindenburg was trying to make use of its report to manipulate the market in a negative way.
Trevor Milton posted a statement on Twitter describing his rationale as well as his next steps. Here is what he published:
“The focus should be on the Company…, not me, Milton said. He further mentioned:
“I plan to defend myself against false allegations leveled against me by outside detractors”. And would be “cheering from the sidelines” for the company.
SCE is reported to be inspecting the company
However, the Securities and Exchange Commission is reported to be inspecting the company, following the report made by Bloomberg. The Financial Times also reported that the US Department of Justice is as well as making scrutiny.
Nikola went viral on the 4th of June. And later the company’s stock grew so high that the company was more valued than Ford, Bloomberg notes. Formerly founded back in the year 2015, its main focus is on creating zero-emission big rigs that make use of hydrogen fuel cell technology.