SAN FRANCISCO—T.J. Rodgers, founder and longtime CEO of Cypress Semiconductor Corp., has filed a lawsuit against his former company and is alleging conflict of interest over Cypress Chairman Ray Bingham’s ties to a China-backed private equity firm that is attempting to buy Lattice Semiconductor Corp.
In a statement released Tuesday (Feb. 21), Rodgers said Bingham is one of two founding partners of Canyon Bridge Capital Partners, an equity investment firm backed by the government of China. Canyon Bridge last November agreed to buy Lattice for $1.3 billion. (That acquisition is still pending and there is speculation that it may be rejected by CIFUS, a U.S. government committee that reviews transactions to protect national security).
Rodgers said he filed the lawsuit in Delaware in late January after his demand for books and records from Cypress was denied. The suit is an attempt to force Cypress to produce the materials he requested, he said.
In a separate statement, Cypress said its independent directors and outside counsel reviewed Rodgers’ claims and “determined they are speculative and without merit.”
Rodgers also initiated a proxy action against Cypress, nominating two people to the company’s board of directors: Dan McCranie, chairman of ON Semiconductor Corp., and Camillio Martino, a director at MagnaChip Semiconductor Corp.
Cypress said it offered to expand its board and add McCranie in response to Rodgers’ lawsuit and proxy challenge, but withdrew the offer after Rodgers refused to withdraw the lawsuit.
Rodgers alleges that Bingham did not reveal his involvement with Canyon Bridge to Cypress’s board when Lattice approached Cypress as a potential “white knight” buyer as an alternative to the Canyon Bridge deal. According to Rodgers, Cypress has twice attempted to acquire Lattice.
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