Paywalled. Text below. TLDR: ARM may have lost its IP to China. ”Arm, the UK chip designer owned by SoftBank, is fighting a boardroom battle with its Chinese

Paywalled. Text below. TLDR: ARM may have lost its IP to China. ”Arm, the UK chip designer owned by SoftBank, is fighting a boardroom battle with its Chinese joint venture after it tried to oust its chief executive. In a series of statements on Wednesday, the UK group said Arm China’s board of directors had voted on June 4 to replace Allen Wu as chairman and chief executive, and appointed a pair of co-CEOs on an interim basis. But Arm China has rejected the claim, with a statement on its official account on the social media platform Weibo saying that Mr Wu “continues to serve as its CEO”. It noted that Arm China is “an independent legal entity registered in China according to the law” and that it is “currently operating normally and its support and services to Chinese customers [ . . . ] continues as always.” Mr Wu continues legally to be in charge of Arm China and three of its subsidiaries, Chinese corporate records show. After the initial flurry between the two sides, Arm then said, in a joint statement with Hopu Investments, the Chinese private equity firm that is a major shareholder in Arm China, that Mr Wu had been investigated after complaints of “serious irregularities” from a whistleblower and several other current and former employees. Concerns around Mr Wu appear to have centred on his potential business interests outside Arm, according to one person familiar with the situation in China. Mr Wu was initially asked to resign but refused, the person added, adding that the situation quickly became muddied by legal complications. The statement said that Mr Wu had failed “to disclose conflicts of interest” and had violated the employee handbook. “The board believes that removing Mr Wu is the most ethical and responsible decision to ensure Arm China’s long-term stability and business prospects.” Arm Holdings headquarters in Cambridge, UK UK based-Arm said, in a joint statement with Hopu Investments, that Arm China chief Allen Wu had been investigated after complaints of 'serious irregularities' from a whistleblower and several other current and former employees © Bloomberg The person familiar with the situation said that mistrust over Mr Wu’s leadership had grown over the past few years both in Cambridge and China, resulting in a joint decision to get rid of him. Mr Wu, a US citizen, has led Arm’s China business since 2014 and became the head of the Arm China joint venture when it was set up in 2018, according to his LinkedIn profile. Mr Wu did not immediately respond to a request for comment. The boardroom fight has placed a fresh spotlight on Arm’s business in China, which has been dogged by concerns of technology transfer after the UK group sold a 51 per cent interest in its Chinese subsidiary to a consortium of local financial investors and Arm partners in 2018. Arm then formed a JV with the group, which is led by Hou An Innovation Fund, a vehicle co-managed by the UK company and Hopu. Arm China has grown rapidly with bases in Shenzhen, Beijing and Shanghai and now employs almost 600 people. Arm China acts as a licensing channel between the UK group and Chinese companies and counts Huawei as a key customer. It was caught in the crosshairs of a US export control on companies working with Huawei last year, and has not been able to circumvent the ban, according to one person with direct knowledge of the situation. Executives at Arm have repeatedly played down the risks of technology transfer and denied its expansion in China was driven by SoftBank. SoftBank bought Arm for £24.3bn in 2016 but it subsequently sold a 25 per cent interest to the Vision Fund, the Saudi-backed $100bn investment vehicle. Analysts expect the Japanese group to further sell its stake in Arm or relist the UK group as part of a $41bn asset sale programme to fund a giant share buyback and reduce its debt.”