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Nikola founder Trevor Milton is being handled ‘as one other shareholder,’ executives say

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Trevor Milton CEO of Nikola

Massimo Pinca | Reuters

Nikola has reduce founder, Trevor Milton, out of all resolution making or consulting on the electrical truck firm following his resignation final week and subsequent allegations of sexual misconduct.

The former government chairman, who holds greater than 91 million shares within the firm, is being handled like every other shareholder, executives instructed CNBC.

Milton, who stays the corporate’s largest shareholder, relinquished his seat on Nikola’s board and resigned as government chairman following fraud allegations by quick vendor Hindenburg Research reportedly resulting in federal inquiries about whether or not he and the agency misled traders. Milton and the corporate have denied lots of the claims within the report.

Nikola Executive Chairman Steve Girsky and CEO Mark Russell tried to distance themselves and the corporate from Milton on Wednesday. They additionally downplayed Milton’s position as an unpaid guide with the corporate by means of the tip of the yr, per the phrases of his resignation.

“He’s no longer an employee, he’s no longer a board member, and so he’s the same as another shareholder at this point,” Russell instructed CNBC throughout a telephone interview. When requested about Milton consulting with the corporate, which was “on an ad hoc basis,” in keeping with his exit bundle, Russell responded, “Same as another shareholder.”

Girsky confirmed Milton is also “not involved in any board discussions.”

Hindenburg Research’s report accused Milton of making false statements concerning the firm’s know-how to draw traders and partnerships with different automakers. Milton and the corporate have denied lots of the claims within the report.

Milton, 38, additionally now faces allegations of sexual assault. Two girls have filed such complaints with Utah authorities towards Milton. Both allegations had been greater than 15 years outdated however individually concerned a cousin and an workplace assistant when each girls had been 15 years outdated.

Milton’s resignation has been detrimental to the corporate’s inventory. Shares of Nikola are down about 40% from Sept. 18 – the final closing worth earlier than his departure.

The firm beforehand disclosed Milton as “the source of many, if not most, of the ideas and execution driving Nikola,” citing, “If Mr. Milton were to discontinue his service to us due to death, disability or any other reason, we would be significantly disadvantaged.”

Despite the hit to Nikola’s shares, many analysts have mentioned Milton’s departure is constructive for the corporate as it would enable it to higher concentrate on executing its plans of releasing battery-electric and gas cell semitrucks. However, Wedbush downgraded the inventory final week to underperform from impartial.

Shares of Nikola popped by about 15% Wednesday after  the corporate reconfirmed its enterprise plans and manufacturing targets.

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