Fight of Velodyne with its Founder Continues

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BusinessWire: David Hall, the founder and the largest common stock holder of Velodyne Lidar, Inc. publishes another open letter to the Company’s Board of Directors:

Members of the Board,

I am pleased that following my calls for meaningful leadership changes at Velodyne Lidar, Dr. Anand Gopalan decided to resign as Chief Executive Officer and a director. Though I believe this represents a first step in the right direction, the root of poor business management and the anti-stockholder culture at Velodyne Lidar remains. This is why today, I am calling on Chairman Michael Dee and director Hamid Zarringhalam to resign from the Board. I believe that both of these individuals have breached stockholders’ confidence and destroyed significant value in the Company.

Since being installed on the Board via a merger with Graf Industrial, a special purpose acquisition company (“SPAC”), Mr. Dee has spearheaded major business decisions that leave him responsible for the Company’s nearly 80% stock price decline, in my view. Despite this poor performance and Mr. Dee’s lack of relevant skillsets or public company board experience, the Board recently elevated Mr. Dee to the position of Chairman.

In addition to Mr. Dee’s lack of relevant skillsets to serve on the Board, stockholders should be aware that he is currently deeply embroiled in litigation at PureCycle Technologies, Inc., relating to his role as Chief Financial Officer following its merger with a SPAC with disastrous results. Mr. Dee is facing serious accusations of misleading investors and fraud.

Beyond his unsettling track record, I am deeply concerned that Mr. Dee and the Board are considering transferring Velodyne Lidar’s sophisticated Alpha Prime lidar manufacturing know-how and associated trade secrets, the crown jewels of the Company’s IP portfolio, to Nikon, which is moving into the lidar space with, among other things, its recent partnership with Aeva, a Silicon Valley startup founded to develop lidar technology. I question how moving the best of the Company’s portfolio of technology to Nikon benefits Velodyne’s stockholders whatsoever. It seems as if this move greatly benefits director Hamid Zarringhalam, an executive employee of Nikon, who is acting within a disabling conflict of interest in making decisions that seemingly benefit Nikon, when he should be focused on what is best for Velodyne Lidar and its stockholders.

We are aware that during a recent conversation discussing the decline in Velodyne Lidar’s valuation, Mr. Zarringhalam commented, “I don’t care about the stock decline because I don’t own any.” This statement reveals a complete lack of professionalism and alignment with stockholders. Clearly, the Company is in serious need of ethical directors with public company and high growth tech experience to help turn around the anti-stockholder culture that pervades the current Board.

Update: BusinessWire: Velodyne responds on David Hall open letter:

David Hall is Attempting to Divert Attention from the Ongoing Arbitration Regarding his Theft of Confidential Intellectual Property

The Company believes that Mr. Hall’s actions are an attempt to distract from the serious and ongoing arbitration against Mr. Hall regarding his theft of Velodyne’s confidential, trade secret information. Mr. Hall has never denied taking this confidential, trade secret information, which he seems intent upon using to further his personal business ventures to the detriment of Velodyne and its stockholders.

Like any enterprise with a focus on innovative, breakthrough technologies, Velodyne is committed to protecting its intellectual property. The Company will take any and all actions to ensure Mr. Hall complies with his legal obligations to refrain from any use or disclosure of Velodyne’s property and to immediately return it to Velodyne. The Company views Mr. Hall’s latest missive as an attempt to divert attention from Velodyne’s upcoming proceeding against him, where an initial procedural hearing is set for September 2, 2021.

David Hall Falsely Portrays the Trusted Long-standing Relationship Between Velodyne Lidar and Nikon

The Company’s relationship with Nikon dates back to 2018, when Mr. Hall served as Chief Executive Officer of Velodyne. As part of its long-standing relationship with Velodyne, Nikon has also been a strategic investor in the Company. Today, the Company continues to have a strong partnership with Nikon as a trusted technology and manufacturing partner for Velodyne’s industry-leading lidar sensor.

Michael Dee and Hamid Zarringhalam are Aligned with Velodyne Lidar Stockholders

Michael Dee and Hamid Zarringhalam are independent directors focused on the long-term success of the Company, who have exceptional track records of success as business leaders and have served as outstanding stewards of Velodyne and its stockholders.

Mr. Hall’s fabricated statements about Mr. Zarringhalam are demonstrably false and libelous. Mr. Zarringhalam never made the comments Mr. Hall claimed, and is in fact a stockholder of the Company, having purchased stock using his own personal funds. Mr. Zarringhalam remains a stockholder today and his interests are aligned with those of all stockholders.

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