MOTORING NEWS - Sexual assault allegations against the founder and former chairman of Nikola prompted additional questions Tuesday about the electric truck startup and its pending deal with General Motors.
The allegations by two women concern Trevor Milton, who abruptly resigned September 21 amid accusations of fraud that had led to a big pullback in shares following the announcement earlier this month of a possible deal with GM.
Milton denied the charges through a spokesperson.
Craig Johnson, a Utah attorney representing the two women, said he was in contact with law enforcement authorities over complaints of unwanted sexual contact when they were minors.
Aubrey Smith, Milton's cousin, alleges that in 1999 when she was 15 years old, Milton "groped her breast without her consent," according to a press release from Johnson's firm.
The second victim, who is unnamed, alleges that in 2004 when she was 15, Milton "digitally penetrated her vagina with his finger after work one day," according to the press release.
Milton "strongly denies these false allegations," a spokesman said. "At no point in his life has Mr. Milton ever engaged in any inappropriate physical contact with anyone."
Shares of Nikola fell 5.2 percent to $18.30.
Will GM deal close?
The company's share price had been under pressure for the last three weeks following a damning report by Hindenburg Research that called the company an "intricate fraud," based on multiple lies by Milton, who it said "misled partners into signing agreements by falsely claiming to have extensive proprietary technology."
The report was released a few days after GM on September 8 announced a manufacturing partnership with Nikola that would give the auto giant an 11 percent stake in the startup.
Nikola rejected most of the claims in the Hindenburg report. But it did not deny that it staged a 2017 video of one of its prototypes apparently in action.
The allegations prompted investigations by Justice Department and other agencies, and Milton resigned on September 21, saying "the focus should be on the company and its world-changing mission, not me."
GM, which had reaffirmed plans to complete the deal following Milton's departure, hinted Tuesday it might change course.
"Our transaction with Nikola has not closed," GM said. "We are continuing our discussions with Nikola and will provide further updates when appropriate or required."
When the partnership was originally unveiled, GM's chief executive praised Nikola as a "disruptor" that could help it built an "all-electric future."
Investors are closely monitoring the Detroit automaker's reaction to the controversy surrounding Nikola.
"The GM partnership is key for the Nikola bulls, and this remains a white-knuckle time until the deal is inked given the events over the last few weeks with Trevor leaving," said Wedbush analyst Daniel Ives. "The stock will be volatile until there is resolution on the GM front."