- Softbank Group Corp (OTC:SFTBY) (OTC:SFTBF) owned Arm is on the verge of regaining control of its defector China joint venture, the Financial Times reports.
- The development will remove a significant obstacle to SoftBank’s IPO ambitions for the U.K. chip designer.
- Arm holds a 47.3% stake in Arm China, while Chinese investment firm Hopu controls a 36% shareholding.
- Also Read: Here’s How Arm Looks To Speed Up Its US IPO
- Arm said: “Arm China is in the process of resolving its longstanding corporate governance issue, and its board of directors has voted unanimously to appoint Liu Renchen and Eric Chen as Arm China’s co-CEOs. Mr Liu has also been duly registered and accepted by local Shenzhen government authorities as the company’s legal representative and general manager.”
- China is an important growth market for Arm, contributing a big chunk of its profits.
- However, Arm failed to audit the China unit’s financials, which hindered the IPO.
- Liu Renchen, a government adviser and vice-dean of a research institute, succeeded Arm China head, Allen Wu.
- Renchen and SoftBank Vision Fund managing partner Eric Chen will join as co-CEOs, FT notes.
- The restructuring paved the way for a new company, “chop.”
- The nearly two-year-long battle began after the Arm China board learned that Wu had set up a personal investment fund that later invested in its Chinese clients.
- Despite a resounding board vote for his removal in June 2020, Wu refused and instead took control of the company by possessing the company chop.
- FT writes that Wu had allegedly taken Arm China “hostage,” terminating several top executives he deemed loyal to headquarters and installed his security team at its Shanghai offices to keep out Arm and Hopu representatives.
