(Yicai Global) June 10 -- Arm Group, the global chipmaker owned by Japan’s SoftBank Group, is fighting a boardroom battle with its China joint venture over dismissal of the unit’s head.

An investigation had revealed that Allen Wu violated corporate guidelines and his actions were detrimental to the firm’s development as well as jeopardizing shareholder and stakeholder interests, Arm Group said in a statement today.

Arm Group and its JV partner Hopu Investment Management recently agreed that removing Wu as chairman and chief executive of Arm Technology China was in the unit’s best interests. The decision was made at a June 4 meeting of the JV’s board under the guidance of Shanghai-based Zhong Lun Law Firm, The Paper reported today, citing the statement.

Arm Group wants to appoint vice presidents Ken Phua and Phil Tang as co-CEOs of the joint venture to replace Wu, 21st Century Business Herald cited the parent company as saying this morning.

Earlier, reacting to media reports about Wu’s ouster, Arm Technology China had said that the board’s decision to remove him had no legal grounding as the meeting was not convened correctly. Wu was still in charge of the company and remained its legal representative, it added.

But Arm Group claims that based on complaints from whistleblowers and several current and former employees, an investigation found that the actions of Wu, a US citizen, had jeopardized the JV’s development along with the interests of shareholders and stakeholders.

Evidence obtained from sources, Arm Group said, indicated that Wu did not disclose to the company the conflicts of interest he had created and violations of corporate guidelines. So the board considered his removal a responsible decision that meets ethical standards and ensures Arm Technology China’s long-term stability and business.

The JV’s board is advancing the selection of its management, and is confident that Phua and Tang will serve as joint CEOs during the transition period, it added.

Arm’s chip architecture is used in 95 percent of the world’s smartphones. It has been battling with Chinese investors over control of the company, a source close to Arm technology China said. Hopu Investment Management and other Chinese investors hold the majority 51 percent stake in JV. Arm Group owns 49 percent.

Editor: Peter Thomas