SoftBank’s Arm flotation hopes hit by legal fight in China
SoftBank is facing a battle to float the British chip designer Arm, as it remains mired in a legal fight with the head of its Chinese joint venture, while London Stock Exchange chiefs try to persuade the company to reconsider its snub of the UK for the public listing.
The Cambridge-based company has been in dispute with Allen Wu, the head of joint venture Arm China, since 2020 when its board voted to remove him.
Wu, who refused to stand down and retains control of the venture because of legal rights, has escalated the battle by launching a third legal action against Arm China, adding additional red tape that SoftBank will need to overcome before floating Arm.
SoftBank, which bought Arm for £24bn in 2016, has been forced to turn to its backup plan of floating the company after its sale to US-based Nvidia collapsed earlier this week on regulatory hurdles. Widespread political and industry opposition in the UK, Europe, US and China scuppered the deal.
Last month, Arm, which holds a 47% stake in the joint venture, warned that it had been stopped from auditing the accounts. On Tuesday, Inder Singh, Arm’s chief financial officer, admitted that the company has to resolve the issue in China to progress its plans.
“[It’s] important for us to make sure that we have certain rights that will be important for our financials,” he said. “One of those will be the continuing right to audit revenues.”
Wu’s latest legal action, first reported by the Financial Times, aims to get him reappointed to the board of Arm China, which contributes about a fifth of the company’s global sales.
Meanwhile, the SoftBank chief executive Masayoshi Son’s decision to snub the UK for the listing of Arm has caused dismay among the financial and business community.
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