(Yicai) Nov. 3 -- Cambricon Technologies, one of China’s top makers of artificial intelligence chips, is being sued by its former chief technology officer for CNY4.3 billion (USD604.3 million) in a dispute over a stock incentive plan.

Liang Jun, who was Cambricon’s CTO and deputy general manager from October 2017 to February 2022, has filed the lawsuit with a Beijing court, seeking compensation for alleged losses related to a share ownership plan, the Beijing-based firm announced on Oct. 31. The case is awaiting trial.

According to the filing, Cambricon had promised him an equity award upon joining the company in 2017. When Cambricon went public on Shanghai’s Star Market in July 2020, Liang indirectly acquired 11.5 million shares of the firm through an employee shareholding platform.

Liang claims he was forced to resign in 2022 because Cambricon failed to provide the working conditions stipulated in his labor contract. Then when his shares became eligible for sale in January 2024, the company allegedly refused to process his request to sell, leading to the current dispute.

Cambricon said Liang’s departure was due to “differences between the two parties” at that time, adding that there is no public evidence to support his claim about unfulfilled labor conditions.

The company also said his demand for CNY4.3 billion in compensation contradicts the terms of the employee shareholding plan, which stipulate that staff who resign during the equity lock-up period must have their shares repurchased by the firm. Liang, it said, refused to fulfill that obligation.

Cambricon added that Liang had previously filed two lawsuits over the same share buyback clause, both of which he lost. Separately, the entities managing Cambricon’s equity incentive plan sued Liang in 2023, seeking a court order to enforce the buyback provision. That case is awaiting a judgment.

Driven by the AI boom, Cambricon’s stock [SHA: 688256] has soared. Its share price almost quintupled in value last year after jumping 147 percent in 2023. Today, the stock fell 2.1 percent to close at CNY1,346.60 (USD189) but was still almost 105 percent higher year to date.

Cambricon recently reported its first-ever profit, buoyed by surging demand for AI chips. It had a net profit of CNY1.6 billion (USD224.9 million) in the nine months ended Sept. 30, versus a CNY724 million (USD100 million) loss a year earlier, according to the firm’s financial report. Revenue soared nearly 25-fold to CNY4.6 billion.

Editors: Dou Shicong, Emmi Laine