If you thought national security meddling was the leading reason why Nvidia's acquisition of Arm from Softbank has not gone as planned, wait until you hear this: the current CEO of Arm China, Allen Wu, is not yet in the position he claims. Wu was ousted from Arm China's board of directors last June due to a conflict of interest, and since then he has refused to cede control of the company.

In fact, he is apparently still holed up in his office nearly a year after his removal.

So a rogue ex-employee is sitting in an office somewhere, but not in real power." No, not quite. Wu is in charge of the official seal of Arm China, and for those unfamiliar with centuries-old Chinese business practices, that is more important than it appears.

Stamps, also known as company chops, are sometimes required in China to give final approval to all matters of business. It can also be legally binding. In this case, it was necessary to formally remove Wu from his position as legal representative of Arm China. The man with the stamp has little interest in using it, at least for that purpose, and that is a big problem for Arm, and by extension Nvidia.

Nvidia hopes to ratify its acquisition of Arm, a deal worth $40 billion, within 18 months of the announcement. If that happens, the acquisition would be completed by March 2022. That is if someone can wrest control of the seal from Woo.

According to sources speaking to the Financial Times, as of January 2021, Nvidia has not formally applied for a review of the deal in China. Therefore, the deal may be postponed. However, Nvidia, Arm, and Softbank insist that the deal will be completed within the given time frame.

There are several other important details to this strange case: Arm China is a joint venture company co-founded by Chinese investment firms. Arm China, which is headquartered in the U.K., owns only a 49 percent stake.

Wu has reportedly been taking cash from Arm China's bank accounts to fund his legal battle with Arm and its major shareholder, Hopu Investments. Wu also fired three executives to replace him, although they were later reinstated by the board. Now, Wu is suing the three and demanding that they return the company's property, Bloomberg reports.

Arm China claims that Wu's position and use of company funds are within the laws of Shenzhen, where Arm China is registered. In addition, Wu reportedly made $179 million in personal investments in Arm China clients.

In an interview with Bloomberg Television, Arm's CEO reaffirmed the 18-month timeline for the sale to Nvidia to be approved, but also acknowledged that "leadership changes in China" are "taking time to resolve."

The best bet for Wu's removal would be litigation in China, but it would take several years to reach a conclusion.