Arm China, which has just ended a boardroom bust-up by ousting its former chairman, may end up in the hands of an entity that has little or no public profile, adding a layer of mystery to the British chip design firm’s joint venture.

In a press release distributed to media outlets through public relations agencies on Wednesday, a company called Lotcap Group said it has agreed a letter of intent with Chinese shareholders of Arm China to buy a 51 per cent stake in the joint venture. It claimed that the proposed equity deal has received “support” from Arm Ltd, the British parent firm.

The statement does not include any names or specific contact information for Lotcap, apart from an email address. An enquiry sent by the Post to the email address resulted in a reply confirming that Lotcap is on track to buy a 51 per cent stake in Arm China, without further elaboration. 

A search of the company’s name - in both English and Chinese - generated no results on Google or Baidu, and a search of the company in Chinese corporate registry databases yielded no results.

The name is included in a government list of registered companies in Macau. According to the skeleton information on the list, a corporate entity bearing the same name in both Chinese and English, is registered in a commercial building in Macau with a capital base of 50,000 Macau dollars (US$6,200).

In the press release, Lotcap said it is committed to investment in the tech sector in the Greater Bay Area, a region that includes Hong Kong, Macau as well as Shenzhen, where Arm China is registered.

People close to Allen Wu, the former chairman of Arm China who still controls an equity stake of about 16 per cent in the joint venture, said Lotcap has reached agreement with Chinese private equity investor Hopu Investment, which owns a 36 per cent equity stake in Arm China through a Hong Kong shell entity, and that the two want to talk to Wu about selling his stake to give Lotcap a majority stake of 51 per cent. The people familiar with the situation declined to be identified as they are not authorised to talk to the media.

One of the people briefed on the matter said that Wu intends to talk to the potential buyer on a possible deal.

Hopu did not immediately respond to a request for comment.

Arm China, which has changed its corporate registration to oust Wu, declined to comment. Arm Ltd declined to comment on the matter.

The 21st Century Business Herald, a Chinese newspaper, quoted an unidentified official at Arm China as saying the company has not been notified about any ownership change.

In the statement, Lotcap said it has created a fund for the purchase and it is seeking nods from all “stakeholders”. If the deal goes ahead, the actual control of Arm China would fall into the hands of Lotcap, the owners of which have yet to be identified.

Separately, the website and social account of Arm China are under the control of its new leadership headed by Liu Renchen, a member of Shenzhen’s political advisory committee and a former deputy dean at the Research Institute of Tsinghua University in the southern city, and Eric Chen, a managing partner at SoftBank Vision Fund who has been leading the Japanese conglomerate’s negotiations with the Chinese government.

Articles and pictures relating to Wu have been largely removed from the corporate website. According to a letter jointly signed by Liu and Chen, the two co-CEOs, Arm China intends to maintain business as usual and keep up close cooperation with Arm Ltd.

Arm China was founded in April 2018 when SoftBank Group Corp agreed to sell a 51 per cent stake of British firm Arm’s mainland subsidiary to a Chinese consortium for US$775.2 million.

 - SCMP