Abstract:
Reuters reported on August 31 that a Chinese court had frozen assets worth up to 2.14 billion yuan (approximately US$300 million) of Dutch chipmaker Nexperia and its equipment business unit. The case was brought by electronics manufacturer Wingtech Technology, the Chinese owner of Nexperia.
Last year, the Dutch government deprived Wingtech of its control over Nexperia. The dispute has strained relations between China and the Netherlands and threatened the global supply of chips needed for cars and consumer electronics.
The measures taken by the Chinese court this time provide new bargaining chips for Wingtech Technology to seek to regain control of Nexperia. However, the ruling does not change Nexperia's current management, nor does it resolve the broader dispute between the two parties over the company's ownership.
The dispute began a year ago. At that time, the Dutch government intervened in Nexperia, which is headquartered in the Netherlands, citing concerns that related technology, capital and production assets may be transferred overseas. A Dutch commercial court subsequently suspended the CEO of Nexperia and placed the voting rights related to Wingtech's shareholding in the hands of an independent agency.
In response, China implemented export controls on Nexperia’s business in China, causing disruption to the transportation of related goods. After talks between Beijing and The Hague, China agreed to allow relevant supplies to resume, while the Netherlands suspended the implementation of relevant orders previously issued.
However, Wingtech Technology has not yet regained its previously lost voting control, and the fundamental corporate governance and ownership disputes between the two parties remain unresolved.
In May this year, Wingtech Technology and one of its subsidiaries sued Nexperia, its equipment business unit, Nexperia's parent company, and three executives. Wingtech Technology alleged that the defendant implemented or assisted in the implementation of what it called discriminatory Dutch restrictions and demanded compensation of 8 billion yuan.
Wingtech Technology said in a submission that the Dongguan Intermediate People's Court has issued an asset freezing order. Currently, the case has not yet gone to trial.
The freezing order involves Nexperia’s equity interests in four companies in China, including its semiconductor businesses in China, Wuxi and Shanghai, and a company wholly owned by its equipment business unit in Wuxi. Relevant measures will take effect from August 20th to 25th and will be valid until August 2029.
As of the time of publication, Nexperia and its equipment business unit had not immediately responded to a request for comment.
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