The ARM China soap opera never ends. While the board of directors has once again ordered the resignation of the CEO, Allen Wu, he is still holding on tightly to his position. This ubiquitous affair has been dragging on for two years. An obstacle for the introduction on the Stock Exchange of the parent company ARM by its owner, SoftBank.
ARM China wants to retain its status
On April 29, the chipmaker designed a new plan for Wu’s departure from his position as CEO. He was to be replaced by two co-CEOs, Liu Renchen, a government advisor, and Eric Chen, a SoftBank negotiator in discussion with the authorities. Just when it was thought that the matter was well on the way to being resolved, Allen Wu has still not moved from his seat.
In early May, SoftBank completed the necessary paperwork to secure the takeover of ARM China. At the same time, a message was distributed via the company’s online networks. It was written by employees who oppose the management changes.
The register reports that this post accuses ARM of trying to take control of ARM China, even though it owns minority shares in the joint venture. A Chinese consortium has owned 51% of the shares since 2018. According to Wu, the acquisition plan would ignore ARM China’s primary purpose: to supply chips to the Chinese market. If the acquisition goes through, the Chinese company would become an uncontrolled affiliate. This status would prevent it from having free access to ARM’s licenses.
Misinformation lawsuits?
Reuters reveals that the company is considering legal action against anyone who uses ARM China’s social networks to spread ” false information.”. Indeed, Wu and his supporters are using ARM China’s social networks to express their opposition. They also use WeChat and other websites associated with the company to spread their messages.
On Thursday, May 5, ARM China said via its Weibo account that “Wu refuses to abide by the decision of the board of directors, has deliberately defied the law, and refuses to relinquish his management duties in the company. “The company says that from now on it will only speak through its Weibo account to avoid confusion with Wu’s posts.
It’s unclear when the situation will be resolved. ARM China accounts for 25% of ARM’s annual revenue. The revolt of Wu and some employees within the subsidiary could make its IPO less profitable. The IPO is due to take place before March 2023 if the situation does not deteriorate.
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