[daan-k]

Some new information has just emerged in the Dutch press.

According to a just published article by the NRC newspaper [0], the owner wanted to use Nexperia's funds to finance another business (WingSkySemi) which was in financial trouble. He would have done this by making Nexperia place large orders for wafers it did not need. The article mentions Nexperia only requiring $70-80 million in wafers, while Nexperia would have ordered wafers from WingSkySemi with a value of $200 million.

In order to achieve this, the owner is said to have put strawmen without financial experience in place and fire European directors. When other directors raised the alarm about this, they were fired according to the article. This issue was raised to the Dutch government, which then intervened.

Have a look at the original article through google translate, it provides a lot of interesting and important details to this story.

[0] https://www.nrc.nl/nieuws/2025/10/14/chinese-topman-gebruikt...

[teekert]

This Dutch article also adds a lot more context, what the Dutch government did starts to make more and more sense and would for sure be something the Chinese would have intervened in if the situation were reversed. [0]

Update: Looks like China has retaliated: [1]

[0] https://tweakers.net/nieuws/240304/nexperia-ceo-bevoordeelde...

[1] https://nos.nl/artikel/2586411-china-legt-chipfabrikant-nexp...

[teekert]

A other Dutch update/summary: https://nos.nl/artikel/2586472-amerikaanse-invloed-en-roekel...

[jacquesm]

What is interesting here is that for obvious reasons the Chinese do not seem to understand - or be able to understand - that NL actually has an independent institute for handling such disputes that will operate with a fairly high degree of impartiality. Abusing funds of one company and jeopardizing its existence in order to prop up a non-related entity abroad is precisely the kind of situation why we have this institution in the first place. Mismanagement is - regardless of who the shareholders are - also something that we frown upon here and there actually is a mechanism to directly intervene in the case of such actions. Seeing the 3 top financial people replaced with strawmen and funneling large amounts of money abroad to buy things the company does not need is a surefire recipe for intervention. This would have also happened if the CEO had been dutch and the shareholders had been dutch, we actually had such a case in the last few years where the top guy (founder, even) at one of our larger IT companies lost his marbles.

[throw73949558]

They needed wafers for 70 million, were going to order for 200 million. 3x more is hardly "funneling large amounts of money".

I would call that typical way to run business, perhaps they were making supplies for next three years, before tariffs kick in... Perhaps they were going to expand.

[jacquesm]

That's a funny thing to say, assuming it is in jest. Of course, just spending 130 million on stuff that you don't need only to destroy it is perfectly normal in the course of running a business. Not. A hundred million here, a hundred there, before you know it it is real money.

What's with all the throwaway accounts on this thread anyway?

[mrkstu]

And firing a bunch of directors who complained? I assume if they were given a rational strategy behind the moves they would haven’t made a peep.

[amazingman]

Do you really think sockpuppet astroturfing is going to work when you created the account today?

[karlgkk]

> I would call that typical way to run business

Then I suppose we should be thankful (or hope) that you do not run any sizable business.

[tinco]

I am sort of surprised we even have an arm of government quick and authoritative enough to be able to intervene here. I always assumed the government would just let any frogs boil.

[slipnslider]

I am too. Although it appears computer and computer machinery, like chips amongst others, are the 2nd largest export[1]. I'm guessing these types of companies are very important to economic stability within the country and economic posturing in outside the company in global trade.

[1] https://www.worldstopexports.com/netherlands-top-10-exports/

[jacquesm]

We really would like to keep these companies alive. Geely buying Volvo is a nice example of a proper acquisition and Geely has - as far as I know - always played by the rules. What happened here would not fly under any management and China should take note, ownership does not give a pass to 'do as you please', we have many stakeholders including employees and customers, not just owners and managers.

[teekert]

Looks like there was some timely pressure from the US.

[jacquesm]

De ondernemingskamer is not a paper tiger. Ask Sanderink about that.

They rarely make decisions that I disagree with, even if I realize I usually don't have all of the facts. Business continuity, employees, shareholders, customers. Those are the priorities and management is definitely not acting with impunity. The shareholder angle here is an interesting one, that route has been stopped off preemptively it seems.

[tinco]

So it seems, but also this seems to have been dragging along since 2023 so it's less sudden than the press makes it seem. The contract with WSS that's underlying the complaint by the former management has apparently been allowed to progress to the point where the US is threatening to simply consider Nexperia a Chinese company for the purposes of sanctions.

[jacquesm]

And rightly so. The timeline here is fairly typical: until the day there is a judgment nothing changes and going through the process usually takes a while. And then everything changes at once. It is clear that they were no longer making decisions in the interest of Nexperia or its customers but solely to benefit Zhang's interests. What is interesting is that Wingtech actually was being defrauded but chose not to act. That's the bit that doesn't make sense to me, unless Zhang also controls Wingtech somehow. In one article it was said that they bought many more wafers than needed in order to destroy them, that's textbook mismanagement.

China, meanwhile has announced 'retaliatory measures', which seems a bit silly because that will just hurt their own exports, and shows that it wasn't necessarily Zhang that was the problem but someone much higher up in the party structure.

[tracker1]

I'm a bit surprised by this move as well... If only someone had done similar to protect the gutting of Sears and K-Mart, even if both companies made several years of bad decisions themselves, the way they were cleaned out is disgusting.

[mrguyorama]

America voted for Ronald Reagan in the biggest landslide victory the US had seen in a very long time.

Reagan promised "deregulation" and "get government out of business" etc, and had a very clear mandate to execute, which he did, IMO to our detriment, by doing things like telling the FTC to just let companies do whatever, and outright not enforce anti-competitive laws if you couldn't show "consumer harm", which explicitly meant you had to show prices going up before you could prevent the monopoly from forming.

What did people expect?

[tracker1]

Reagan was out of office by three decades when Sears finally collapsed, and 16 of those interim years was with a Democrat in office, and Democrat control of both houses for several of those years.

[FooBarWidget]

I'm surprised they did this while the cabinet is fallen.

[Cthulhu_]

That's just the cabinet, so lawmaking is on hold for now, but the government and the ministry of economic affairs is still operational. A government can't just stop working because a small (albeit important) part of it is waiting for the elections.

[jacquesm]

They can't make laws, but they can still enforce laws.

[eqvinox]

Indeed, how did they even figure this out?

[ArnoVW]

in the NRC article it says that board members started to complian that the CEO was "making choices that were not in the interest of the company". Four days later they were fired.

"It was at that moment that Nexperia alerted the ministry of Economic Affairs"

[tinco]

Right, I suppose at that point there was some chauvinism or at least fear of being held accountable for it. But the thing that surprised me was that there was actually someone listening at Economic Affairs. Perhaps at that level a board of directors has connections at the government. Either that, or there's some AFM type branch that listens to directors' complaints.

[adrian_b]

The press is full of contradictory information, so it is hard to guess which is the truth.

This information about misdeeds of the CEO looks like a very convenient excuse for the Dutch government, while another article published in the press claims that, according to newly published court proceedings, already at a meeting in June between US officials and Dutch officials USA had requested the removal of the Chinese CEO by the Dutch, as a condition for not enforcing export controls over Nexperia.

https://www.politico.eu/article/us-pressured-the-netherlands...

Both claims could be true, USA has pressured Netherlands to remove the Chinese CEO, then the Dutch have investigated the CEO to find a reason to intervene and they have found this dubious deal where he bought a double amount of wafers compared to the actual needs.

This deal may be abusive, but it looks rather mild in comparison with how most CEOs mishandle the assets of their companies. I doubt that there are many CEOs against whom a thorough investigation would not find such deals. Here at least he got usable semiconductor wafers, but many such deals are for valueless software or consulting.

[furyg3]

I can imagine that there could be a case of parallel construction to build a case to get a specific desired outcome. I also think that if you're right and this is an example of a 'mild' case of mismanaged assets it's still pretty egregious.

I find the even milder circular financing of deals like nVidia investing in OpenAI to be concerning.

[scotty79]

Seems like business as usual. It's just that the industry it operates in is kinda sensitive subject for everybody right now.

[rcxdude]

This is exactly the kind of thing you're not meant to do with a company you don't wholly own (and to some extent with any limited liability company). Part of the deal is that as an executive or majority shareholder the company is not an extension of yourself, it's a seperate entity and when making decisions about it you are meant to act in the interests of that company. This is sadly not well enforced, but it is the kind of thing where shareholders can and will take action.

(Musk has been heavily criticised for pulling these kinds of shenanigans between Tesla, SpaceX, and X, but it seems like there are not enough shareholders willing to take him to task for it)

[Doxin]

To be clear the specific intervention used here is very rare. It's really not business as usual, but it's also not nation state shenanigans luckily. Just regular old grift.

[scotty79]

Yeah, the intervention is unusual, but what the companies tried to do is completely common scheming.

[powerapple]

this theory would contradict with the national security reason used by the government though. I have read in Chinese sources that they plan to remove the European directors, reasons I don't know.

[tracker1]

It seems that microchips are a major export, a single industry in a country collapsing can cause a lot of damage. From other mentioned articles, it seems like the company was setup to extract all value to prop up another company... not dissimilar from K-mart and Sears stripped of all value at the end. Now imagine that accounts for say even 5% of GDP and other industries rely on that product as well.

I've been advocating for years that US prescription medications should require dual sourcing and at least 50% domestic production purely for security reasons. You can ramp up from 50% with multiple providers a lot easier than 0.

[powerapple]

I can see that. WingTech bought it for profit, the best way to get the maximum reward is from the stock market. It is actually not rare operation in Chinese companies. But I doubt this is the reason Dutch government would interfere using the national security excuse. There are other ways to handle this, and would be less damaging. I am more inclined to believe that the US's pressure and the current management who wants to use this as a chance to take control of the company.

[Thorrez]

I guess that depends on 2 things:

* how critical Nexperia's chips are to national security

* how much this bogus order would harm Nexperia

If the bogus order is sufficiently harmful to important chip production, this could harm national security.