In 2019 funds controlled by Wu invested in Bestechnic, an ARM licensee and developer of audio chips, which went public on the Shanghai stock exchange in December 2020. The IPO provided Wu with a stake worth about $200 million for an investment of about $20 million, the report said.
Wu has previously defended the action of investing in ARM licensees saying it is common practice in the IP industry. But it is thought he fell out with the board of directors of ARM China for not bringing the opportunity to the Hopu-ARM Investment Fund, a fund set up specifically to invest in Chinese startups (see Report: VC dealings at heart of ARM's China trouble and ARM VC fund formed for China). Wu set up a fund called Alphatecture Hong Kong Ltd. in July 2019 to invest in Chinese startups and reportedly did not disclose this to ARM and Hopu until much later.
Wu was dismissed from ARM China by a 7-to-1 vote of the board of directors on June 4, 2020, but refused to leave. Under centuries-old Chinese law, while Wu holds the company's seal he remains the legal representative of the company and is almost impossible to remove against his will.
Wu also has control of the company's bank account which holds between $500 million and $600 million, the report said. There have been delays in sending license fees back to the UK parent and Wu has been using the funds to pay his legal fees in the fight against the major investors in ARM China, the report added.
Meanwhile Wu's continued presence in charge of ARM China and control of its finances is said to be jeopardizing the proposed $40 billion sale of ARM by SoftBank Group to Nvidia Corp. (see ARM's China struggle threatens $40bn Nvidia deal).
According to reports, Wu was offered between $100 million and $200 million to go in 2020.
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