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Nikesh Arora Photo Credit: Reuters

SoftBank probes shareholder campaign against former president Nikesh Arora

27 March, 2018

SoftBank Group Corp is probing whether the shareholder allegations against India-born former president Nikesh Arora and chief strategy officer Alok Sama were an internal hit job.

The Japanese tech conglomerate said on Tuesday a “special committee” of its board was investigating these matters. “The special committee has reached no conclusions in its investigation and does not intend to comment further until the completion of its investigation,” a SoftBank Group spokesperson told VCCircle in an email response.

The development comes 21 months after Arora quit SoftBank in June 2016 and after Sama, in May last year, resigned from SB Investment Advisers, which manages the $100 billion SoftBank Vision Fund.

The Financial Times first reported news of SoftBank’s probe, citing people aware of the matter it didn’t name.

Arora’s exit was especially abrupt considering that he was the heir apparent to SoftBank founder and CEO Masayoshi Son. Arora and SoftBank had denied the allegations at the time, but he left the company just days after he was officially cleared of any wrongdoing, following a probe by law firm Shearman & Sterling.

At the time, Arora had said he was leaving because of a clash over the timing of the expected transition in leadership. SoftBank had said that his departure had nothing to do with “the allegations, raised in letters sent to its board by Boies Schiller Flexner and Mintz & Gold, the law firms, on behalf of shareholders, with just one named investor, Nicolas Giannakopoulos, a Swiss national,” the FT report said.

The SoftBank spokesperson reiterated on Tuesday that allegations against Arora and Sama were baseless.

“For more than two years, SoftBank and its senior executives have been subject to attacks based on falsehoods, innuendo and erroneous media reports. While we do not understand the motivation behind these allegations, our Board thoroughly investigated claims against Nikesh Arora and Alok Sama and found them to be baseless.”

The FT report added that corporate investigations company K2 had been commissioned in 2015 to “compile information on” Arora, but that it it could not determine who had hired the firm.

Separately, The Wall Street Journal reported that K2 was commissioned by an Italian private equity executive who previously had “business interactions” with Rajiv Misra, the India-born executive who now heads SoftBank Vision Fund. Misra, an IIT alumnus, took over in October 2016, just four months after Arora’s departure.

The Vision Fund counts the Saudi wealth fund and the government of the emirate of Abu Dhabi as key investors. The Saudis are pitching in with 45% of the total investment into the Vision Fund. Sama’s resignation from fund was seen as an attempt by SoftBank to mollify the Saudis, who were reportedly concerned by allegations of kickbacks and conflicts of interest.

SoftBank has emerged as one of the most prominent investors in Indian tech startups. It has previously said it plans to invest upwards of $10 billion in India. It has heavily invested in ride-sharing firm Ola, e-commerce giant Flipkart and mobile wallet Paytm, among others.

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SoftBank probes shareholder campaign against former president Nikesh Arora

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