Arm investigates allegations of suspicious financial activity at Chinese division

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Arm’s struggles to bring its rogue division in China under control continue, with reports in The Telegraph reporting a new investigation launched into suspicious payments to senior executives at the state-sponsored Arm / China joint venture. Even though the $ 40 billion acquisition of Arm by Nvidia still goes through regulators (and has some issues), this particular side story in the history of the UK-based company may still prove to be true. a thorn for the whole agreement.

The news comes as Arm confirms in his annual report on the accounts that he has received “allegations relating to the adequacy of payments” forwarded to the upper echelon of the division. A division that is still headed by Allen Wu, head of the joint venture, which Arm has failed to remove since his attempt to regain control of the Chinese division in 2020. A situation the report describes as between the hands of Arm The Chinese board of directors, which is “in the process of settling some disputes with a member of senior management … which remain unresolved”.

The “certain disputes” refer to the fact that Allen Wu rejected the vote of the board of directors of Arm China to fire him in 2020. Apparently under the cover of Chinese law, Allen Wu has succeeded in retaining control of the joint venture, which led him to retain both the corporate seal and dismiss employees without return from Arm’s headquarters. Arm China has also redoubled its efforts to develop technology more in line with specific Chinese requirements, even though this was part of the company’s business strategy from the start.

More concerning for the Nvidia-Arm deal, Arm said in the report that the situation had prevented him from accessing Arm China’s accounts for a financial audit and assessing the current value of his 49% stake in the company – whose latest figure was valued at around $ 827 million. The remaining 51% is held by Hopu Investments, backed by the Chinese state.

Regarding the report, an Arm official responded that “Arm continues to work with all key parties to resolve Arm China disputes. We have no additional comments at this time. That may be true, but regulators are unlikely to be happy with the current situation and Arm’s inability to present a full account of its global operations.

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