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Wu Xiongang responds ARM China's struggle for control: no conflict of interest ARM no right to remove me

via:CnBeta     time:2020/11/28 10:31:21     readed:166

Beijing time on November 28, according to the financial times,In his first interview with international media, Wu xiongang, CEO of arm China, defended his attempt to control arm's China business. Wu xiongang's $100 million personal investment fund has led to a dispute with arm and its supporters, and new details are emerging.

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Wu xiongang said arm and its Chinese partner Hopu had no right to try to remove him as CEO of arm China in June. He denied that there was a conflict of interest in investing in companies that benefited from arm's low-cost license, adding that both arm and Hopu were aware of his plan and supported it.

He said his personal fund Alphatecture had been discussed from the beginning and disclosed to the board that "we have received support ".

Wu xiongang pointed out that the decision of arm China's board of directors to remove him by a 7:1 vote in June this year was invalid, because according to the agreement he reached with Houpu, they need to "reach an agreement" on all major issues concerning arm China. He also hinted that there was a procedural error in holding board meetings, "which is one of the problems we are solving."

Magnolia said the agreement did not cover board decisions. ARM said the board of directors of the chinese joint venture decided that management needed to be adjusted ," we are confident that a resolution will be reached soon ".

ARM's failure to expel mr wu, who continues to have legal control over ARM china, would be a stumbling block to the $40 billion takeover of ARM. ARM parent company Softbank Corp. said in 2018 that China accounted for one-fifth of ARM overall sales.

"All these challenges can be solved and it is natural that people disagree ." Wu Xiongang said.

Conflict of interest of individual fund

At the same time, new details about Wu's personal fund are emerging. According to three people familiar with the matter, Lanting Investment (Pavilion Capital), a wholly owned subsidiary of Singapore's state-owned investment company Temasek, has committed $50 million to Wu's personal fund. Lanting investment is not evaluated.

Wu also arranged investments last year from two board members of arm China, one of whom later sought investment from arm China this year.

"Many of these behind the scenes arrangements are unknown to the board," said one arm director. "There are too many complicated interests involved."

The financial times saw financing documents showing that mr. wu used his position as a ARM chinese CEO to attract investors and use company employees to run personal funds. "Having a place ARM China's core management, Wu can ensure that our funds occupy the most advantageous position to access their value chain resources ." Financing materials show.

Wu said investment partners were "industry practices ".

To prove that ARM knew his plan, he asked Cheng Jiamao (Jason Cheng), an outside lawyer from Dacheng Law firm, to briefly show the minutes clearly from a board meeting. ARM CEO this meeting, ARM CEO Simon Higgs (Simon Segars) positively appraised Wu Xiongang's fund. Minutes of the meeting also showed that ARM China's board of directors "approved" the $30 million investment inang Fund.

A person close to arm's China board then sent the financial times what appeared to be the same document, which showed that the word "approval" had been crossed out with a pencil and replaced by "ideas to be further studied.". The first draft of the August 2019 meeting proposed by Wu xiongang has been rejected, the source said.

ARM said :" ARM china's board suggested to mr wu that he could explore the possibility of establishing a fund, but Alphatecture had never been approved by the board ." (Author / Xiao Yu)

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