Arm China CEO refuses to go despite SoftBank taking control
Middle Kingdom subsidiary claims Allen Wu refusing to 'hand over his management duties'
The Arm saga is continuing with the ousted CEO of Arm's renegade Chinese division still refusing to step down, despite being fired again recently.
Both SoftBank and Arm were last week seeking an agreement that would allow them to regain control of Arm China, the chip designer's subsidiary in the Middle Kingdom. SoftBank has only a 49 percent stake in the company, with the rest held by a consortium of various organizations that have ties to the Beijing government.
The pair have tried to wrest back control of Arm China since 2020, when they fired chief executive Allen Wu over apparent conflicts of interest and alleged violations of the company's code. However, Wu refused to step down and has kept physical possession of the Arm China's official seal and registration documents, which give him the authority to continue to run it.
The two companies sought to get support from the Chinese authorities for a change of leadership to be officially recognized, and it was reported last week that Arm China's board had voted to remove Wu and replace him with Liu Renchen, vice dean at the Research Institute of Tsinghua University in Shenzhen, and Eric Chen, managing partner at SoftBank Vision Fund, as co-chief execs.
But this was not the end of the matter. Earlier this week, on the same day that SoftBank gained the paperwork necessary to secure legal authority over Arm China, a letter was posted on the company website supposedly from employees protesting the change of management and accusing SoftBank of seeking to control Arm China despite only having a minority stake in the company.
Now Reuters has reported that Allan Wu is again refusing to step down as chief executive, despite the change of management being approved by Arm China's board and signed off by the Chinese authorities. Arm China told the newswire he was refusing to "hand over his management duties."
Arm has declined to comment on the matter and instead referred us to its previous statement that the longstanding corporate governance issue with Arm China has now finally been resolved, and a blog post on its site giving further details on the appointment of the two co-execs.
SoftBank did not immediately respond to our request for confirmation of the situation regarding Arm China.
Back in London, UK Prime Minister Boris Johnson has weighed in on the planned public offering of Arm by SoftBank, in a bid to have the company, which was founded in the UK, listed on the London Stock Exchange rather than in New York.
- Arm fires the head of its Chinese unit – but Arm China says Allen Wu still works there
- SoftBank aims to keep control of Arm after IPO – report
- Goldman Sachs reportedly set to head up $60bn Arm IPO
- Arm China website posts letter from staff opposing change of management
According to Reuters, Johnson has written to SoftBank executives as part of a last-ditch effort to convince them to change their minds over where Arm should be listed for its initial public offering.
The Financial Times, meanwhile, says that executives from the London Stock Exchange have also embarked on a charm offensive to persuade SoftBank to switch to London.
The general consensus appears to be that there is little possibility of SoftBank changing its plans, however.
Previously, we reported that Goldman Sachs was being lined up to be the lead underwriter for Arm's public offering, and that SoftBank was aiming to value the chip designer at up to $60 billion for the sale. SoftBank is also said to be planning to keep a controlling stake in Arm after the IPO, at least for the near future. ®