Electric and hydrogen truck start-up Nikola and owner Trevor Milton have been issued with grand jury subpoenas from the US attorney’s office amid allegations of fraud.
Milton resigned from his role as chief executitve of Nikola in September after a report from hedge fund firm Hindenburg Research claimed the company's success was “an intricate fraud” based on “an ocean of lies”.
The report referred to a video of a truck rolling downhill to give the impression it was cruising on a highway, and stencilling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.
Nikola has a joint venture with Iveco to produce heavy duty electric trucks by late 2021. Iveco pumped $250m into the deal in September 2019.
Milton’s resignation came just two weeks after Nikola also signed a $2bn (£1.6bn) partnership with General Motors. However, negotiations with GM over the manufacture of Nikola’s Badger pick-up truck are said to have been hampered by the report.
The grand jury subpoenas were issued to the Phoenix-based company and Milton on 19 September.
According to a report in the Financial Times, Nikola also received various other subpoenas in September for current and former staff.
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The subpoenas were related to “a fact-finding inquiry related to aspects of the company’s business” as well as the allegations contained in the Hindenburg report.
The report's findings have already cost Nikola $5m in legal and regulatory costs, this week's Q3 company update said.
New Nikola chief executive Mark Russell said the company was “fully cooperating” with fraud investigators.
In September, Nikola said it would be taking legal action over the report's claims, saying it was “replete with misleading information and salacious accusations directed at our founder and chairman".
Referring to Hindenburg Research’s reputation for short-selling, Nikola added that the start-up has been "vetted by some of the world's most credible companies and investors".
“We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock,” it said.
