SoftBank defends under fire COO Nikesh Arora
Japanese technology conglomerate SoftBank has spoken out in defense of Nikesh Arora, its president and COO - and presumed successor to CEO Masayoshi Son - who has been accused of conflict of interest and poor investment performance.
The allegations, which SoftBank called "unsubstantiated," were raised in a letter sent by an anonymous group of shareholders in SoftBank and its subsidiary Sprint, and signed by a partner at US law firm Boies Schiller & Flexner. The letter, which has been posted online by Quartz, calls for SoftBank's board to investigate and possibly dismiss Arora. A separate letter to Sprint's board calls for Arora to be dismissed as a director there as well.
Son told Japanese media that he has "complete trust in Nikesh and 1,000% confidence in him and know he will continue to do great things for SoftBank in the future." Son, who served as president until the appointment of Arora in 2015, has previously said that he expects Arora to succeed him "at the appropriate time."
Among the concerns raised in the letter is the possibility that Arora has used his positions at SoftBank and his previous employer Google to gain advantages for Silver Lake Partners, where he is a senior advisor. The letter also accuses Arora of unethical behavior in his role at Greek telecommunication firm TIM Hellas, where he was a board member from 2006-2007 when the company was owned by Apax Partners and TPG.
In addition, the writers allege that Arora has shown poor judgment in a number of investments made while he was CEO of SoftBank Internet & Media Inc. (SIMI). These include a $90 million round for property listing platform Housing.com, prior to a decline in the company's value due to mismanagement and personality conflicts between CEO Rahul Yadav and the board. Also criticized was SoftBank's 2014 purchase of online video site DramaFever for $100 million; the site's traffic has since fallen by 50% and the letter says SoftBank has been unable to find a buyer.
Arora joined SoftBank in 2014 as CEO of SIMI, having previously served as senior vice president and chief business officer at Google. Following his appointment as president and COO, he invested JPY60 billion ($482 million) in SoftBank as a show of commitment to the firm's future.
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