Arm Ltd, owned by Softbank, is experiencing an unusual corporate drama in China. According to a Bloomberg report, citing a statement from Arm Ltd he received, the boss of Arm China refuses to resign after being fired. In addition, “rogue boss” Allen Wu has hired security guards to prevent Arm executives from visiting the premises, and does not conduct business in Arm’s interest.
Mr. Wu is “spreading false information and creating a culture of fear and confusion among the employees of Arm China”, a UK-based representative of Arm Ltd said in a statement. “Allen’s focus on his own conservation has also endangered semiconductor innovation in China, as he has attempted to block the critical communication and support our Chinese partners demand from Arm for chip designs. current and future. “
The problem with Wu appears to have started earlier this year. In June, the board of directors of Arm China, which includes representatives from Arm Ltd and Chinese investors, decided to oust Wu after discovering that he had created an investment company to compete with the activities of Arm in China. Wu refused to accept the decision and remains in control at Arm China’s headquarters in Shenzhen. It should be understood that Wu has some leverage due to Chinese law and company registration even though he is a US citizen. Wu holds the company registration documents and the company seal, cup, or stamp – and he won’t be relinquishing that just yet.
Another side of this argument
Arm China employees are also not happy with the current situation. An open letter signed by 176 employees and shared on WeChat in China, complains that directors of Arm Ltd and Hopu Investments have contacted clients of Arm China and threatened to modify or cancel existing contracts. In addition, some members of staff report having received individually “Threats and harassment” of these parties.
Softbank is currently considering the sale or public listing of Arm. Nvidia is said to be one of the parties interested in making a deal. However, this kind of corporate turmoil in China is not a useful context for negotiations and agreements.
It is unclear how this situation will be resolved in the strategically important Chinese operation whose main function is to sell chip design licenses in the country. Both sides have requested support from Chinese regulators, but will Chinese regulators step in to help resolve the situation anyway? Basically, relations between the United Kingdom and China are not very warm at the moment.