This is messy, even for SoftBank.
The ouster of a CEO is usually a behind-closed-doors affair, even if the writing’s on the wall as with WeWork’s Adam Neumann. But that’s not the case with SoftBank-backed semiconductor company Arm. The British company, which is SoftBank’s biggest bet, is very publicly clashing with its Chinese venture over whether the lead of operations there, Allen Wu, is out.
The key semiconductor player said on Wednesday that it had installed two interim co-CEOs to replace Wu as chairman and CEO after looking into a whistleblower complaint.
While that usually is the end of it, Arm China came back with an uh, nope—saying Wu was still in charge as Arm China is an independent entity legally domiciled in China.
SoftBank returned with more ammunition. In a statement alongside Hopu Investments (its partner in Arm China), SoftBank hinted at much more behind the story of removing Wu: “Evidence received from multiple sources found serious irregularities, including failing to disclose conflicts of interest and violations of the employee handbook.”
This all comes after Arm sold a 51% stake of Arm China to a consortium of investors including state-backed entities such as the Silk Road Fund in 2018. Arm itself meanwhile has struggled to live up to SoftBank founder Masayoshi Son’s dreams for the chip designer, which was acquired for $36 billion in 2016. Read more.
Oh right, SoftBank Vision Fund is also preparing to cut about 15% of its staff after reporting record losses in the last fiscal year, per Bloomberg.
Private equity, hospitals, and the coronavirus: Hospitals and physicians are in an especially tenuous position right now. The coronavirus has flattened revenues from lucrative elective surgeries as caretakers focus on Covid-19, leading to layoffs and pay cuts. Now the microscope is focused even more on private equity-backed healthcare companies.
In the latest round of criticism, four Democratic members of Congress are accusing Leonard Green & Partners of taking some $658 million in fees and dividends from its Los Angeles-based hospital chain, Prospect Medical holdings. The quartet say that Leonard Green & Partners extracted those payouts even as Prospect’s finances deteriorated, with operating income falling from $142 million to $17 million in 2018.