TuSimple Sacks Chairman, CEO and CTO on Insider Dealing Suspicions - Embark Technology (NASDAQ:EMBK), Aur

Key Takeaways:

• TuSimple sacked Hou Xiaodi, its co-founder, CTO, CEO and chairman, after discovering he engaged in undisclosed dealings with a Chinese rival
• The companys shares fell 46% after the announcement, demoting it from clear leader in its sector to more comparably valued with its peers

By Doug Young

Talk about blowout.

The going was never going to be easy forTuSimple Holdings Inc.TSP, a leading maker of autonomous truck technology that was getting caught up in geopolitical tensions between the U.S. and China. But a shockingnew announcementhas suddenly stripped the company of its core executive, Hou Xiaodi, who was serving in multiple roles as chairman, CEO and CTO before his removal by the board on Oct. 30.

While the latest twist in TuSimples plight initially looks political, and Hou even implies that politics were involved ina responseon his LinkedIn account, the reality may be far simpler.

In our view, the chain of events leading to Hous termination appears linked to a series of dealings with a rival company in China that went unreported to the board. Such insider dealings used to be quite common in China, including a classic case involving French food giant and Danone (BN.PA), which accused local business partner Wahaha of stealing property from their joint venture and using it to make its own virtually identical products.