Ola boardroom row pits Softbank against Aggarwal
BENGALURU/NEW DELHI: Japan’s Softbank Group Corp. is in the midst of a boardroom battle with Bhavish Aggarwal, co-founder and chief executive of cab-hailing firm Ola, according to two people familiar with the matter.
Late last year, Ola co-founder and chief executive Bhavish Aggarwal blocked a proposed deal involving Tiger Global Management selling part of its stake to Softbank, the people cited above said, requesting anonymity. A few months earlier, Ola had changed its articles of association (AOA) to include a clause to prevent Softbank from buying more shares in Ola without approval from the company’s founders and board.
After Aggarwal blocked the proposed deal, Tiger Global partner Lee Fixel resigned from Ola’s board.
However, Softbank is now in talks to anyway buy Ola shares from Tiger, the people said. The investors are considering ways to get around the terms of Ola’s AOA and could come up with an offshore deal structure, the people said.
Tiger Global owns 16% in Ola while Softbank is the company’s largest shareholder with a stake of 26-27%, according to Tracxn, a data tracker.
Ola denied that Softbank and Tiger were exploring such a deal. “Ola’s shareholders are fully committed to the company and are strong backers of Ola’s Founders in their mission. Ola’s shareholders are reputed global institutions and we can unequivocally assert that none of them will do anything which violates their contractual agreements and contravenes Indian laws. Ola is focused on fulfilling its mission of building a global institution every Indian is proud of; will not be detracted or drawn into useless speculations,” a spokesperson said in an email.
Softbank declined to comment. Tiger Global didn’t respond to an email seeking comment.