Arm was bought by Japan’s SoftBank for £24bn in 2016. It set up a joint venture in China in 2018 with state-backed Hopu Investments, which has 51pc of the company, and appointed Mr Wu, a company veteran, to run it.
In 2020, Arm China’s board voted to fire Mr Wu but he has retained control of the company because of legal rights he enjoys. In recent months he has appeared to distance Arm China from the British company, using a new name and talking up technology it has developed in the communist country.
Arm also said that it had been unable to access Arm China’s accounts in order to audit its financials and assess the value of its stake in the venture, which has been recorded at $827m.
The company said: “We were unable to obtain access to the financial information or management of [Arm China]… we were also unable to obtain sufficient appropriate audit evidence in relation to the carrying amount of the group’s investment in Arm China.”
That 1% makes all the difference. Even if you think it’s just a technicality to conform to local law about JVs or summat, that 1% still matters.