Super Micro Computer, an AI-adjacent technology firm known for manufacturing servers equipped with Nvidia’s GPUs, has appointed a general counsel. This decision follows a key recommendation by the company’s board after an independent investigation examined the management and accounting practices last year. For this prominent role, Super Micro has selected its current senior vice president of corporate development, who will now also serve as general counsel.
Super Micro Computer, a Fortune 500 company, has been working to improve and modernize its internal operations and announced the appointment of a general counsel on Monday. Yitai Hu, the current senior vice president of corporate development, will assume the role of chief legal officer at the $20 billion tech firm. According to sources such as Hu’s LinkedIn profile and California state records, he also manages Eponym Investments, a general investment firm.
The announcement of Hu’s new role coincides with the appointment of Scott Angel as a new independent director on Super Micro’s board. Angel, who has 37 years of experience in audit and assurance at Deloitte, retired in December 2017. This announcement is particularly timely, as Super Micro has been dealing with a complex accounting issue over the past five months, following its former auditor EY’s sudden departure last October, which raised concerns about the company’s financial controls.
Charles Liang, CEO and founder of Super Micro, stated in a press release that their significant growth positions them as a leading industry player with ample opportunities for further value creation. He expressed confidence that the appointments of Scott Angel as an independent director and Yitai Hu as general counsel would support continued growth.
Angel is regarded as an audit committee financial expert and spent 25 years as an audit partner in Silicon Valley. His experience includes serving clients in the technology sector and leading Deloitte’s semiconductor industry practice from 1993 to 2017. Deloitte & Touche LLP served as Super Micro’s registered public accounting firm from 2003 until their dismissal in 2023, after which Super Micro hired EY.
A spokesperson for Super Micro declined to comment further.
These appointments come at a pivotal time for Super Micro, which is involved in building high-efficiency servers and data centers. The company recently partnered with Elon Musk’s xAI Grok team to establish a 750,000-square-foot data center in Memphis. Super Micro plays a critical role in the AI ecosystem, elevating its presence and stock value alongside companies like Nvidia, OpenAI, and Anthropic. Nonetheless, investors’ confidence was shaken due to accounting issues, resulting in the company’s share price dropping over 17% in the past six months.
According to S3 Partners, Super Micro is the second-largest short in the technology hardware and equipment industry group, with 22.3% of its floating shares shorted, which translates to a short interest valued at $3.89 billion. Year-to-date, short sellers in the company’s stock have increased their positions by adding 31.2 million shares worth $1.1 billion, corresponding to a 38% increase, as stated by S3 Managing Director Ihor Dusaniwsky. During the past 30 days, short sellers added 10.7 million shares, marking a 10% increase in total shares shorted.
Despite the challenges, Liang stated that finally issuing financial filings, after delays, marked an important milestone and signaled an end to distractions. During a call with analysts last month, he mentioned that the company is focused on achieving a $40 billion revenue target by 2025. However, the fallout from the accounting issues persists; since August, Super Micro and Liang have faced at least five lawsuits and investigations by the Department of Justice and the Securities and Exchange Commission. The company has affirmed its cooperation with regulators.
The company’s troubles intensified when EY resigned last summer due to concerns about Super Micro’s internal controls and governance, prompting the board to form a special committee to investigate. Last August, the board appointed veteran lawyer Susie Giordano to join and lead the special committee overseeing the investigation. As the investigation continued, Super Micro delayed filing its annual financial report, as well as two quarterly reports, resulting in a Nasdaq warning about potential delisting.
Having completed the investigation, Super Micro issued its financial statements and announced compliance with Nasdaq rule requirements in February. The company appointed BDO USA as its new auditor and named a principal accounting officer along with a chief accounting officer by promoting two internal finance executives. Super Micro is also actively searching for a new chief financial officer with more experience to replace the current CFO David Weigand, a recommendation derived from the special committee investigation.
The hiring of a general counsel and a new CFO were two of six key measures proposed following the investigation. Additionally, the board recommended expanding its legal department with additional in-house attorneys, aligning with the company’s size, complexity, and recent rapid growth.
Yitai Hu will report directly to CEO Charles Liang, according to the company. Hu, licensed in California where Super Micro is headquartered, has been with the company for five months. He previously worked at law firms Norton Rose Fulbright, Wilson Sonsini Goodrich & Rosati, and Alston & Bird.
This report was originally featured on Fortune.com.
