ARM AND its Japanese owner Softbank are readying a move to recover control of the firm's renegade China division and oust its boss, as Softbank prepares to float the British chipmaker this year.

Arm China's boss Allen Wu was sacked in 2020, but he has refused to leave and relinquish the firm's 'chop' - the official company seal used for registration documents - which allows him to continue to run the firm and ignore directors.

The board has now got the backing of authorities and is in possession of documents which will allow it to have a new company stamp issued within days, Bloomberg reported.

Wu's refusal to step down from the firm has been a speed bump for Softbank boss Masayoshi Son as he looks to float Arm following the collapse of a takeover deal by US rival Nvidia earlier this year.

The two firms have made progress to regain control after agreeing to shift a chunk of Arm's ownership to Softbank, Bloomberg reported.

Chinese government officials reportedly viewed the standoff with Wu as a means of drawing concessions from Arm and ensuring they can retain access to the firm's semiconductor designs.

Plans to transfer ownership of the firm to Softbank spurred officials into action to ensure the UK chipmaker retained its stake.

Ministers in the UK regard Arm as a strategic asset amid a global shortage of semiconductor chips.

The firm and owner Softbank have been the subject of a charm offensive as political leaders look to woo it into a London listing.

Anthony Browne, the Conservative MP for Cambridge South, where Arm is based, told City A.M. it was vital that the UK was listed in London.

"Ownership matters, particularly when it comes to such a strategically important company and major employer, and as a nation we have historically been far too casual about such offerings," he said.

However, Masayoshi Son has indicated the firm was eyeing up New York as the favoured destination for a floatation, where bosses think it is likely to fetch a higher valuation on the Nasdaq exchange compared to London's markets.

(c) 2022 City A.M., source Newspaper