Japanese investment firm SoftBank may have the paperwork to prove it has taken control of chip design firm Arm’s troubled Chinese outpost but appears not yet to have secured passwords to the firm’s web site because it currently carries what appears to be a letter from staff protesting the ouster of former CEO Alan Wu.
Arm China’s board voted to oust Wu two years ago over conflicts of interest, but he retained control of the company.
SoftBank, which owns 49 per cent of the entity, continued to seek means to appoint its preferred slate of executives to run the organisation and appeared to have succeeded as of last Friday.
But on the very day SoftBank secured the legal niceties needed to install its preferred people and remove Wu’s claims to control, Arm China staff posted a letter to the company website, in which they protested the change*
The letter, which we’ve translated with online services, accuses SoftBank seeking to control Arm China despite its minority shareholding, and by doing so ignoring Arm China’s purpose of providing the major commercial distribution channel for Arm to license its IP to Chinese licensees. The letter paints the takeover as unreasonable, harmful to investors, and illegal (on unspecified grounds, and despite relevant Chinese authorities signing off on the changes at the company).
The document, signed by hundreds of staff, also suggests that Arm China could struggle to perform effective research and development under new management.
Arm China is permitted to conduct independent R&D aimed at the Chinese market.
The Register has sought comment from Arm HQ about the letter.
The document does not threaten any action by Arm China staff, but does mention the company has accumulated a good group of talented semiconductor pros. Such folk are in short supply everywhere, so could easily back up the ire expressed in the letter with a decision to quit. Doing so would be a complication for SoftBank as it works to arrange a float of Arm, its alternative to the failed sale of the chip design firm to Nvidia. The mess at Arm China was widely considered an impediment to an initial public offering for Arm. A recalcitrant or diminished workforce in China could make all of Arm less valuable.
For now, The Register imagines Arm China’s new SoftBank-backed managers may have more pressing concerns to worry about, such as securing passwords to the CMS powering armchina.com so that staff can’t post this sort of thing. ®
*This sort of letter often disappears from websites, so we’ve preserved a PDF of it here.
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