BEIJING, June 10 (TMTPOST) Shanghai-based Arm China Ltd has been embroiled by an internal spat following the surfacing of the disagreement over the replacement of its CEO on Wednesday.

The joint venture’s parent company Arm Ltd had announced earlier on Wednesday a decision to replace chair and CEO Allen Wu with acting co-CEOs Ken Phua and Phil Tang. 

However, Arm China, the joint venture of British chip designer Arm Ltd and Chinese private equity firm Hopu Investments, responded by claiming that Wu continued to be its CEO in a statement posted on its official WeChat account. 

Arm Ltd and Hopu rebutted that by saying that Wu was fired on June 4 after complaints from current and former employees over alleged financial irregularities and interests of conflict led to a probe.

The board of Arm China removed Wu from his position in early June, for fearing that his U.S. citizenship would entangle the company into the ongoing U.S.-China tensions, according to a source familiar with the matter.

Chinese telecom equipment Huawei was included on the Entity List of the U.S. Department of Commerce, implying that Huawei’s chip suppliers must obtain permission prior to their business transaction with it.

In a statement released on June 4, Arm China said that the removal of Wu did not conform to the proper legal procedure. 

Wu became Vice President of Arm Ltd’s China markets in 2007 and was promoted to General Manager for China markets in 2009. He became President of Arm Ltd Greater China markets in 2013.