Arm ac­cuses its China di­vi­sion chief of cre­at­ing ‘cul­ture of fear’

The Daily Telegraph - Business - - Technology Intelligen­ce - Matthew Field By

CAM­BRIDGE chip de­signer Arm has ac­cused the head of its Chi­nese joint ven­ture of in­still­ing a “cul­ture of fear” and hurt­ing its busi­ness fol­low­ing a bit­ter board­room row.

Allen Wu, chief ex­ec­u­tive of Arm China, has re­fused to step down from the joint ven­ture af­ter be­ing sacked by Arm and other in­vestors.

Arm China has since en­gaged in a so­cial me­dia cam­paign to dis­tance it­self from its UK par­ent com­pany. This week, it posted a let­ter on WeChat signed by al­most 200 staff claim­ing it was a “strate­gic as­set” for China and urg­ing Beijing to “pro­tect it”.

The em­ploy­ees said: “We plead with the gov­ern­ment to pay at­ten­tion to the tur­bu­lence Arm China is fac­ing now, and in­ter­vene to pro­tect this strate­gic as­set.” They added Arm China was a “Chi­nese-con­trolled joint ven­ture that should abide by Chi­nese laws”.

Its par­ent com­pany hit back, ac­cus­ing Mr Wu of re­fus­ing to give up the com­pany’s seal, known lo­cally as a chop, which gives him lo­cal le­gal au­thor­ity at its base in Shen­zhen.

A spokesman said: “Allen has re­fused to re­lin­quish the com­pany chop and step down, while prop­a­gat­ing false in­for­ma­tion and cre­at­ing a cul­ture of fear and con­fu­sion among Arm China em­ploy­ees.”

Mr Wu, 52, is un­der­stood to have been ousted by Arm China’s board af­ter he was ac­cused of covertly set­ting up a Cay­man Is­lands ven­ture cap­i­tal fund and rais­ing cash for it with­out Arm’s knowl­edge. Mr Wu has not com­mented on the al­le­ga­tions.

Arm China did not re­spond to a re­quest for com­ment. It has pre­vi­ously called the claims “in­ac­cu­rate and mis­lead­ing”. Bloomberg re­ported Arm China dis­puted the lat­est al­le­ga­tions.

Lo­cal in­vestors, in­clud­ing Chi­nese fund Hopu, are be­lieved to have voted to re­move him in a board meet­ing that took place on June 4.

While Arm’s China staff made their own ap­peal to Beijing, Arm’s UK spokesman said it was in com­mu­ni­ca­tion with gov­ern­ment au­thor­i­ties to “peace­fully re­solve the cur­rent is­sue”.

The spokesman ac­cused Mr Wu of block­ing deals with its Chi­nese cus­tomers who are sup­plied with Arm’s chip de­signs to build semi­con­duc­tors, smart­phones and other de­vices.

Arm spun off its China di­vi­sion in 2018 in a $775m (£598m) deal that saw a con­sor­tium of lo­cal in­vestors take a 51pc stake.

Mr Wu has at­tempted to as­sert the in­de­pen­dence of Arm China.

Arm China has re­jected all the claims of its par­ent com­pany and said that Mr Wu con­tin­ues to run the busi­ness.

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