Trevor Milton, the disgraced founder of zero-emission truck maker Nikola Corp., apparently is trying to regain influence at the company by backing board nominees — nominees that Nikola’s current board of directors rejects as lacking relevant experience.
Nikola in a news release said its board has rejected a slate of five nominees proposed by an entity controlled by Milton, who was recently sentenced to four years in prison for securities fraud.
On Jan. 26, Nikola said, it received a notice from M&M Residual LLC declaring its intent to nominate a slate of five directors for Nikola’s eight-member board: Cole Cannon, Derek Johnson, Hans Peterson, Paul Southam and Dave Sparks.
An election for the company’s directors is expected to be held at Nikola’s 2024 annual stockholder meeting.
The board said the nominees “have no public company experience, add no skills or experience to the board, and indisputably lack the depth of experience that the current Nikola board members bring to the company.”
It said the nominees “lack the expertise or knowledge needed to navigate the complexities of a zero-emissions trucking and energy infrastructure business.”
The nominees were Cole Cannon, Derek Johnson, Hans Peterson, Paul Southam and Dave Sparks.
As reported by Bloomberg, Dave Sparks is known for the “Diesel Brothers” reality-TV show, which features modified vehicles that led to a fine for alleged violations of the Clean Air Act.
Prison Time and Penalties for Trevor Milton
Milton in January was sentenced to four years in prison for engaging in securities and wire fraud for misleading investors about the development of Nikola products and technology.
In addition to the prison sentence, Milton was sentenced to three years of supervised release, ordered to forfeit a property in Utah, and ordered to pay a fine of $1 million.
From late 2019 through September 2020, the court found, Milton induced investors to buy shares of Nikola through false and misleading statements on social media and in interviews.
A Truck That Didn't Run
Milton made false claims regarding nearly all aspects of Nikola’s business, including that the company had early success in creating a “fully functioning” semi-truck prototype known as the “Nikola One,” when Milton knew the prototype was inoperable. In fact, critics charged that when the futuristic-looking truck was filmed “on the road,” it had to be towed to the top of the hill and then coasted downhill without power.
There also were claims made about reservations for the future delivery of Nikola’s semi-trucks. While Milton represented those reservations as binding orders representing billions in revenue, the vast majority of those orders could be cancelled at any time.
While there were many skeptics, the presence of industry giants like Ryder System, Meritor, and U.S. Xpress lent credibility to the project when the Nikola One was unveiled in 2016. In 2020, just months before Milton left Nikola amidst fraud allegations, HDT’s Jim Park pointed out that Milton’s information about the truck raised some questions.
Last summer, Nikola started production of fuel-cell-electric Tre trucks using a European cabover from Iveco.
According to Nikola, on October 20, 2023, Milton was found liable in an arbitration with the company, resulting in an award to the company of $165 million plus interest, which includes a $125 million settlement with the Securities and Exchange Commission from December 2021.
“This judgment remains unpaid, and Nikola is vigorously seeking all legal avenues to recover monies owed to the company by Mr. Milton,” Nikola said in its news release.
The company emphasized that Milton is separated from the company entirely and has had zero involvement in Nikola’s day-to-day operations since September of 2020.
Nikola explained that its current board is made up of “a diverse group of reputable, leading experts in their respective fields — from trucking to startups to technology to energy, as well as customer service — all integral aspects of company business.”