Imagination Drops CEO, What Next?

When a CEO is abruptly removed from his position at the helm of a leading intellectual property (IP) company owned by Chinese investors, it certainly begs the questions, what next?

This is the question a lot of people in the U.K. technology industry are asking, when Imagination Technologies announced on Friday that its CEO, Ron Black, was stepping down with immediate effect from the company and the board – so immediate that they even removed him from the web site straight away.

This is surprising given the events of last week, when British government intervention put the brakes on an emergency board meeting at which four new directors representing China Reform Holdings, the owners of Imagination Technologies, were to be appointed [China Reform is the limited partner of Canyon Bridge, who bought out Imagination in 2017]. While it was understood that Black was to stay on as a result of winning that mini corporate boardroom battle, China Reform clearly wasn’t going to let this stop them.

On Friday, April 10th, only a few days after this first round of the battle, Imagination issued a statement saying Black was to go immediately and replaced by Ray Bingham as an interim CEO; Bingham is currently executive chairman and a partner at Canyon Bridge. But the same statement also stated the company was “committed to increasing its investment in the UK as it seeks continued growth in the USA, Europe and Asia.”

Former Imagination CEO Hossein Yassaie gets involved
In an unprecedented public intervention, former CEO of Imagination Technologies, Hossein Yassaie, said to EE Times, “The story is still developing, but I have unusually decided to get involved and speak out. I am in deep discussion with relevant [UK government] cabinet ministers. This is about China Reform taking control.” He suggested that following the intervention last week, they stopped the board change and the appointing of its own directors, waited a couple of days, and then forced Black out.

In a public post, Yassaie said, “As a founder and ex-CEO of Imagination Technologies who left the business in 2016, whilst wishing it the best, I have so far intentionally refrained from making public comments about the company. But the recent events are so important for the company, its people and our country that I feel I need to speak out and make a few key points, which I have also directly made to our senior government ministers who need to take note (and I have been assured they are) and take necessary actions before it is too late.”

He said that Imagination provides key and essential enabling technologies for telecoms, automotive, consumer, industrial, medical and defense end markets; and that its’ IP is often for critical and sensitive applications for customers around the world, who “rightfully demand and expect adequate independence, security of supply and trust in the organization.” For these reasons, the UK needed to learn from past mistakes and start adequately protecting key capabilities, entities and companies that make the nation adequately independent and relevant in areas that really matter. He added, “This can and should be done whilst welcoming foreign investment which should be governed under certain rules to protect our national interest.”

Yassaie said the latest events were worrying in that the CEO and staff had to have the stand-off with its Chinese owners to ensure the company’s independence and protect its global customer base. He added, “But last Friday’s action forcing the departure of the CEO by the owners is both wrong (and I imagine not at all in the spirit of the discussion with U.K. government) and certainly is not in the interest of the company, its people, its customers and importantly our nation.”

He said that Black had done a good job in turning the company’s fortunes around, which includes earlier this year winning back the slot at Apple which it lost in 2017. “Any ‘normal commercial’ owner interested in the success of a business would, at such juncture, be supporting to the team and respecting the customers’ views and interests. That is not happening here!! The question that has to be asked is ‘Why not?’.”

Yassaie added, “The illogical and misguided events in-flight at Imagination should be viewed with serious concerns, as they suggest there is a real risk for the company to lose its UK capabilities and base altogether over a period of time. That is very bad on many fronts including key IP, important tech know-how, highly skilled jobs and independence in a number of key enabling technologies for our country.”

EE Times approached Imagination Technologies for comment, to which the response was that all the information was in its press release. In it, the company made efforts to point out that it was committed to the UK and highlighted its success under Canyon Bridge ownership. Interim CEO Ray Bingham said in a statement:

“Since acquiring Imagination Technologies in 2017, we’ve made great progress in transforming the company and we remain fully committed to the UK and to supporting our customers around the world.

“We are having a very successful year with multiple licensees of our performance-leading A-Series GPU, continued growth in the mobile and automotive GPU markets, and strategic partnerships around our ray tracing technology. We look forward to continuing that momentum as we introduce category leading new products and expand the business on all fronts to position it for continued growth across a number of key markets around the world.

“We thank Ron for his service and wish him all the best for the future.  I would also like to thank our customers and staff for their continued support.”

The questions now, however, are: if Ron Black was behind the company’s turnaround in winning back customers and future product strategy, how will the company maintain its standing within its non-China customer base? This is particularly a concern in the United States, if the boardroom battle ends up in China Reform’s favor. And can the next CEO help them win not just trust among its customers, but also that Imagination’s IP would not be perceived as a risk under full China control?