Investors want Softbank President Nikesh Arora out, co defends its Rs 4cr-a-day executive
Tokyo: Japanese telecom giant Softbank today came out in defence of company President and heir apparent Nikesh Arora after “unidentified investors” called for his ouster questioning him for possible conflict of interest and poor decisions. The company termed the allegations as baseless and unsubstantiated.
In an 11-page letter, a group of investors in SoftBank Group Corp. called on the board to investigate and possibly dismiss Arora, the company’s second in command. The letter questioned his track record and qualifications as president and heir apparent to billionaire founder Masayoshi Son.
Arora, who joined Softbank after spending a decade at search giant Google, is touted as the company’s "rising star" and was paid a whopping $135 million between September 2014 and March 2015. On a daily basis, his salary stood at Rs 120 crore per month or Rs 4 crore a day by dollar valuations eight months ago.
The request came in a letter to SoftBank’s board dated Jan. 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, Bloomberg said in a report today.
The letter, according to the report, questions the executive over conflicts of interest due to his existing advisory role in private equity firm Silver Lake. The complainants further suggest that he may have been involved in past wrongdoing and generally poor business decisions.
A separate letter from one investor to the board of Sprint Corp., which SoftBank controls, asks for his removal as a director there for similar reasons. The letter further targets Arora for "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," Schwartz wrote in the letter. The investors have demanded an internal enquiry by an independent agency to “establish compelling grounds for the boards of SoftBank and Sprint to dismiss Mr. Arora from his executive and board positions.”
Softbank, however, came to its President’s defence, saying it had complete confidence in Arora’s management.
“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.
Son, 58, called Arora the most likely candidate to succeed him.
Arora has also made an enormous personal bet on the future of SoftBank. Last August, he said he would buy 60 billion yen of the company’s shares, worth $483 million at the time. That was the largest insider purchase by an executive in Japan for at least 12 years.