Shares in electrical and hydrogen-powered truck startup Nikola plunged on Monday after the corporate’s founder resigned amid allegations of fraud – simply two weeks after signing a $2 billion partnership with Basic Motors.

The corporate mentioned late Sunday that Trevor Milton resigned and the departing government chairman mentioned he would defend himself in opposition to accusations that the corporate made false claims about its automobiles, allegations Nikola rejects.

Milton mentioned in a message to Nikola workers that he was stepping apart as a result of “the main focus must be on the corporate and its world-changing mission, not me.”

Shares within the firm based mostly in Phoenix, Arizona, have been off 30% in premarket buying and selling. A report from Hindenburg Analysis from Sept. 10 mentioned the corporate’s success was “an intricate fraud” and based mostly on “an ocean of lies” together with a video exhibiting a truck rolling downhill to provide the impression it was cruising on a freeway, and stencilling the phrases “hydrogen electrical” on the aspect of a automobile that was truly powered by pure gasoline.

Hindenburg mentioned it had taken a brief place in Nikola inventory, which implies it may revenue if the inventory goes down.

Information experiences have mentioned that the Securities and Trade Fee, the U.S. inventory market regulator, and the U.S. Justice Division are wanting into the allegations in opposition to Nikola.

Nikola issued a press release saying the Hindenburg report was “replete with deceptive data and salacious accusations directed at our founder and chairman” and had employed an legal professional to judge potential authorized recourse. It has mentioned the video didn’t describe the automobile as transferring below its personal propulsion and that the corporate does have working vans.

Underneath the partnership introduced with GM, the Detroit-based automaker would take an 11% possession stake in Nikola and would engineer and construct Nikola’s Badger hydrogen gas cell and electrical pickup truck. GM mentioned in a press release Monday that “we acknowledge Trevor Milton’s departure from Nikola and the choice of the Nikola board to maneuver ahead.”

GM mentioned it could go forward and shut the agreed transaction “to grab the expansion alternatives in broader markets” with its gas cell and battery techniques, and confirmed it could construct the Badger.

In alternate for the 10-year deal, GM was to get $2 billion price of Nikola’s newly issued frequent inventory that can are available three increments by means of 2025.

Information of the deal on Sept. eight despatched shares of each firms surging regardless of a broader market downturn. GM has been below strain from Wall Road to extra shortly exploit its electrical automobile expertise, whereas the GM deal gave the startup added credibility, in keeping with analysts.

Underneath the deal, Nikola might be chargeable for the gross sales and advertising of the Badger, constructed on GM’s new battery electrical truck underpinnings and utilizing GM gas cell and battery expertise. GM additionally will provide batteries for different Nikola automobiles together with heavy vans.

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