Arm finally ousts China CEO to clear way for IPO
This is the second time the company has tried to get rid of CEO Allen Wu from its Arm joint venture in China
UK chip designer Arm has replaced the CEO of its joint venture in China, Allen Wu, after trying to wrestle control of the unit for the last two years.
The SoftBank-owned company sold a majority stake in Arm China to investors in 2018, as reported by NIkkei Asia. The dispute over the management of the company originated in 2020, when Arm attempted to replace Wu because it believed he was putting the progress of Arm China and the interests of the company’s shareholders and stakeholders at risk.
Wu refused to leave the company, though, and continued to appear at industry events as its China CEO. Currently, on his LinkedIn page, he is listed as being the chairman and CEO of Arm Technology (China) from April 2018 to present.
This longstanding dispute has made it difficult for Arm to carry out activities like audits. The company outlined in its latest annual report that it was in the process of resolving certain disputes with a member of the senior management team in Arm China and, that its joint venture’s financial data was unaudited.
Arm told IT Pro it has appointed Liu Renchen, vice dean at the Research Institute of Tsinghua University in Shenzhen, and Eric Chen, managing partner at Softbank Vision Fund, as co-CEOs.
“Arm China is in the process of resolving its longstanding corporate governance issue, and its board of directors has voted unanimously to appoint Liu Renchen and Eric Chen as Arm China’s co-CEOs,” the company said in a statement. “Mr Liu has also been duly registered and accepted by local Shenzhen government authorities as the company's legal representative and general manager.”
Arm China’s legal representative, too, has been changed from Wu to Liu, according to corporate filings from yesterday. It also shows Wu is no longer chairman of the board or general manager of Arm China. Liu is listed as the new general manager while the position of chairman is temporarily vacant.
After SoftBank pulled the plug on the sale of Arm to Nvidia in February, Softbank CEO Masayoshi Son expressed the intent to take the company through an IPO. By regaining control of the company, Arm will be hoping that Arm China can complete an audit which is needed for companies when they pursue a stock launch.
Wu has told local media that his removal was illegal and attacked reports that Arm plans to remove itself from the joint venture by transferring its 47% stake in Arm China to SoftBank. He said that foreign companies are threatening China’s supply chain and technology self-sufficiency.
The former Arm China CEO had said in February that the company might go public in Shanghai or Hong Kong after 2025, as reported by the South China Morning Post. Wu said that the firm’s Chinese shareholders, who control 51% of the joint venture, have the discretion to pursue an independent IPO. He said that Arm China is supportive of Arm’s IPO, and hoped that Arm would also support Arm China’s.
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