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