ARM in struggle for control of Chinese subsidiary

June 11, 2020 //By Peter Clarke
ARM in dispute over control of Chinese subsidiary
Chip technology licensor ARM Ltd. (Cambridge, England) has fallen out with its minority-owned Chinese subsidiary over the status of ARM China's CEO. ARM could be facing the takeover of its operations in China.

ARM had told Bloomberg news agency that the board of directors of ARM China had voted to sack its CEO Allen Wu on June 4 after complaints of conflict of interest and an internal investigation. It add that Ken Phua and Phil Tang had been appointed the venture’s interim co-CEOs.

According to reports, ARM China than responded by saying on social media that Wu was still in charge and that the board's decision was invalid because proper procedures had not been followed. Further reports said that the Chinese venture had responded to allegations against Wu by saying that Tang had been dismissed on May 26 for "major violations."

It is now not clear who is in charge.

ARM, which was acquired by Japan's SoftBank in 2016, has about 6,000 employees around the world with design centres all around the world.

This power struggle has been in the making ever since ARM agreed to create to a joint venture to conduct business in China back in 2017.

It started with the formation of a venture-capital fund with Hopu Investment which then formed ARM China as a joint venture as a joint venture with ARM. In 2018 the situation evolved again with the introduction of further investors and the reduction of ARM's stake to 49 percent.

At the time investors included: the Hopu-Arm Innovation Fund, also known as Hou An Innovation Fund, sovereign wealth fund China Investment Corp., Silk Road Fund, Singapore's Temasak Holdings, ARM, Hopu Investment Management and Shenzhen government-owned conglomerate Shum Yip Group.

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