Lawsuits around ARM China put Nvidia deal in doubt

April 13, 2021 // By Peter Clarke
More lawsuits fly around ARM China
Lawsuits are growing around ARM China, a joint venture with ARM of the UK, threatening to prevent a deal to sell ARM to Nvidia.

Confusion surrounds the fate of ARM China and the wider $40bn deal for Nvidia to buy ARM as the Chinese joint venture files lawsuits against three senior executives. 

The controvesy surrounds Allen Wu, who was sacked as CEO of ARM China in June 2020 but refused to leave. Now ARM China, still under the control of Wu, has filed lawsuits against three senior executives designated by ARM to replace Wu, according to a Bloomberg report.

Ken Phua and Phil Tang were appointed interim co-CEOs of ARM China back in June 2020.  Wu then fired three executives, including Tang, who were then reinstated by the board of ARM. In the lawsuits ARM China is demanding the return of company property, according to unnamed sources referenced by Bloomberg.

Hearings in the law suits against the three ARM-appointed executives are expected in May while hearings in a lawsuit against ARM China from two minority shareholders seeking to overturn the board's decision to sack Wu are expected in late April.

The lawsuits could roll on for years and would appear to be but one element in protracted negotiations to persuade Wu to withdraw and return control of the company to ARM Ltd. Wu is reportedly seeking a pay-off and indemnity from subsequent legal proceedings. However, negotiations between SoftBank and Wu appear to have broken down making the situation increasingly complicated.

Although Nvidia agreed to buy ARM from SoftBank Group for $40 billion the confusion over control and status of ARM China could prove a major stumbling block. A number of regional trade authorities are also examining the deal.

Wu's hold on ARM is partly due to local Chinese law which makes it difficult to change control of a company without physically holding the company stamp and registration documents. Despite his so-called sacking in June 2020 Wu has simply refused to give


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