A conflict at the Chinese branch of chipmaker Arm means that the local CEO, who was fired last week, does not want to resign, invoking an ancient custom.
Last week, Allen Wu was fired from Arm China. But for the time being, the man refuses to resign, with the support of some of the staff. Parent company Arm has been trying to get rid of the man since 2020, but that turns out to be more difficult than first thought.
Wu was accused of a conflict of interest two years ago but then also refused to leave the Chinese branch of the British chip company. That division is a joint venture between Arm itself and the Chinese investor Hopu Investment.
A new attempt is now being made, but according to Reuters, Wu is refusing through the company’s official Weibo account. Instead, he and his associates are spreading false information via social media.
The exact details are vague, but Wu has been able to resist all along based on an ancient Chinese business rule, where he holds some official “seal” of the company, allowing him to take orders from the board of directors could lay aside. According to PCgamer, this led to situations where Wu had set up his own security team.
Now the local government in Shenzhen is said to have recognized one of the two new co-CEOs, Liu Renchen, as the legal representative. This may take away the power of the old CEO, but he does not seem to pack his bags yet.
Arm has been in the news in the past two years with the acquisition by Nvidia. The Japanese Softbank currently owned the chip designer but wanted to sell to Nvidia. However, that deal was cancelled due to competition concerns, among other things, so Softbank is looking at an IPO by March 2023. But for the IPO to run smoothly, there must be no local departments that are hijacked by (ex-)CEOs.