Arm Retakes Control of China Operation, Erratic CEO Replaced
Allen Wu replaced by co-CEOs Renchen Liu and Eric Chen.
The chairman and CEO of Arm China, who refused to give up his prestigious tech leadership role despite being fired in 2020, may have finally been pushed out of the door. A Reuters report says that Allen Wu has been replaced and that all Chinese legal processes were satisfied.
The replacement of the Arm China CEO appears to be a rapidly developing story. On Wednesday, we reported on Allen Wu's exit being imminent when Arm went to court to get new business registration documents and a new seal (sometimes called a chop) issued. Mr. Wu had steadfastly refused to let go of these important symbols of ownership in Chinese business.
Earlier today, with the wheels of business law looking like they were going to roll over Mr. Wu, the stubborn Arm China boss claimed there were flaws in the business registration process by which new documents and a new seal were issued. He also published a letter to Arm China's WeChat page. This letter, apparently signed by 430 Arm China staff, said that the organization would continue with Wu as the leader, even though the court issued documents and a seal.
However, an Arm spokesperson insisted all Chinese law had been followed in full, with a new seal and business license granted by Chinese governmental authorities in Shenzhen. "The relevant agency in Shenzhen has registered Dr. Liu as the company's legal representative and general manager, and duly issued a new chop and business license to Dr. Liu," said an Arm Ltd spokesperson.
Dr. Renchen Liu is a vice dean at the Research Institute of Tsinghua University in Shenzhen. Liu will become Arm China's co-CEO, alongside Eric Chen, a managing partner at the SoftBank Vision Fund.
It seems pretty certain that Wu's attempts to stay on his throne aren't quite over yet, but this might be a significant milestone for Softbank/Arm Ltd in taking back control of its Chinese Joint Venture.
Wu has previously acted in ways out of the ordinary for a big tech boss. For example, when Arm first tried to fire him, he posted security guards at Arm China premises to stop outside execs from visiting the business. In addition, he had previously been suspected of setting up an investment firm competing with Arm's business in China. More recently, Wu's rogue Arm China operation boasted of declaring independence from Arm Ltd and having its own China R&D team of 400+ scientists.
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Arm IPO Process Smoothed
Arm owner Softbank must feel relieved if its China JV issues are finally over. For example, Arm China had previously refused outside auditing, which was enough of a stumbling block for the doomed Nvidia deal. With the Arm IPO being readied by Softbank, Arm China CEOs working in concert with the parent company should help make the process as smooth as possible.
We can't be sure how Softbank and Arm Ltd managed the cooperation of the Chinese authorities in securing the new registration and seal. It might have been aided by Arm Ltd initiating a transfer of its shares in the China unit, reckons the FT.
Mark Tyson is a news editor at Tom's Hardware. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.
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waltc3 When new businesses hailing from outside China open up inside China, it becomes a running bet to see how long it will take China to try and nationalize the company...;) If they don't quite go that far, they "as good as" nationalize it, while denying nationalizing it. In any event, the IP is forfeited.Reply -
missingxtension If you don't have 7 minutes to waste watching the video. It comes down to an archaic law about having a seal or stamp. You have to physically have that in China, like a notary stamp in the US l. Chinese Arm CEO went missing with said stamp seal, so legally it was problematic. So fast forward now, problem solved. You can have your 7 minutes to do all you want with them. Unless you are a slow reader! Watch the video and save time!Reply -
TCA_ChinChin Reply
Seems really weird from a Western perspective, but I guess some Asian countries still have certain laws or customs that take into account those seals/stamps like China or Japan. Still really bad that there isn't or wasn't a better solution other than getting it back. Definitely another hit on Chinese market's already dreadful reputation.missingxtension said:If you don't have 7 minutes to waste watching the video. It comes down to an archaic law about having a seal or stamp. You have to physically have that in China, like a notary stamp in the US l. Chinese Arm CEO went missing with said stamp seal, so legally it was problematic. So fast forward now, problem solved. You can have your 7 minutes to do all you want with them. Unless you are a slow reader! Watch the video and save time!