SoftBank Investors Call for Internal Probe of No. 2 Arora
A group of investors in SoftBank Group has called on the board to investigate and possibly dismiss Nikesh Arora, the company’s second in command, in a sharply critical, 11-page letter that questioned his track record and qualifications as president and heir apparent to billionaire founder Masayoshi Son.
The request came in a letter to SoftBank’s board dated January 20 from the American law firm Boies Schiller & Flexner and signed by Matthew Schwartz, a partner at the elite New York firm, without identifying the shareholders or how much stock they own. The critique of Arora, which hasn’t been made public, questions whether the executive has conflicts of interest due to his existing role as a senior adviser to the private equity firm Silver Lake. It also suggests he may have been involved in past wrongdoing and generally poor business decisions. A separate letter from one investor to the board of Sprint, which SoftBank controls, asks for his removal as a director there for similar reasons.
In addition to these allegations, the investors criticised Arora’s allegedly “poor investment performance and a series of questionable transactions” during his tenure. “Despite these issues, the SoftBank board saw fit to make Mr Arora the third-highest paid executive in the world without any track record of accomplishment at the company,” wrote Schwartz.
The investors are demanding that the boards at SoftBank and Sprint conduct “an internal investigation” by an independent firm. “We believe that an independent investigation will establish compelling grounds for the boards of SoftBank and Sprint to dismiss Mr Arora from his executive and board positions.” SoftBank denied that Arora has done anything wrong and called the letter “unsubstantiated allegations” from “unidentified shareholders.” The Tokyo-based company said it vets any potential conf licts in Arora’s investment decisions and has complete confidence in his management. It said the board is in the process of reviewing the letter. “I have complete trust in Nikesh and one thousand percent confidence in him and know he will continue to do great things for SoftBank in the future,” Son said in a statement. Sprint declined to comment.
One of the investors challenging Arora is Nicolas Giannakopoulos, a
46-year-old Swiss national. He said that his firm holds a bit more than $100,000 of shares of SoftBank and Sprint. Giannakopoulos said he is offended by Arora’s ethics and a his-
tory of deal-making he views as selfserving. “This is a kind of person, a kind of manager, who has no place in this world,” said Giannakopoulos.