SUMMARY
Rajeev Misra became the SoftBank Vision Fund CEO in 2016
Misra has been accused of running a smear campaign against his colleagues
SoftBank suspected that all complaints against top exec were an insiders’ job
SoftBank Vision Fund chief Rajeev Misra has been accused of running a smear campaign against his former colleagues — Nikesh Arora and Alok Sama — to make his way to the top and become the right-hand of CEO Masayoshi Son.
According to a report published in the Wall Street Journal, Misra planted negative news about Arora and Sama, formulated a shareholders campaign to pressure SoftBank to fire them and lured one of his colleagues into a “honey trap” of sexual blackmail.
Arora was said to be the heir apparent to Son, and had worked closely with the SoftBank’s chief on several big deals. Arora left SoftBank in 2016, while Sama left in April 2019. Misra was also working closely with SoftBank CEO with several investments, including Uber and WeWork.
SoftBank clarified that it will be looking into the accusations. “For several years, we have investigated a campaign of falsehoods against SoftBank Group and certain former employees in an attempt to identify those behind it. SoftBank will be reviewing the inferences made by The Wall Street Journal,” the Japanese conglomerate’s spokesperson said.
Meanwhile, Misra’s spokesperson has denied the allegations. The spokesperson told WSJ, “These are old allegations which contain a series of falsehoods that have been consistently denied. Mr. Misra did not orchestrate a campaign against his former colleagues.”
The Depths Of The Smear Campaign
As per the WSJ report, the smear campaign had started back in 2015, when Misra joined SoftBank only a few months ago. For this, Misra had reportedly partnered with an Italian businessman, Alessandro Benedetti, who had worked with private intelligence operatives and computer hackers.
Misra also paid $500K from his account at Standard Chartered Bank to Barkmere Group, a British Virgin Islands company controlled by Benedetti, as per an email and the people familiar with the payment instruction. However, Misra’s spokesperson clarified that the payments were for investment in the oil industry.
Bendetti had reportedly been given a special cellphone to discuss the plans. Besides that, Benedetti also sent a special team to Tokyo to set up a honey trap for Arora, involving one or more women. As per the plan, the women would “lure” Arora into a hotel room rigged with cameras to obtain compromising images. However, Arora did not fall for it.
Benedetti had also hired a private intelligence firm K2 Intelligence to investigate more about Arora and Sama, and also recruited a Swiss private intelligence operative, Nicolas Giannakopoulos, to work on the campaign.
Giannakopoulos had later distributed screenshots of Arora and Sama’s private banking records and emails to journalists. Besides this, K2 also hired a London-based PR firm Powerscourt Group to seed this information to journalists. As per WSJ report, the operatives referred to Arora by the code name, West.
Giannakopoulos, on the other hand, hired a freelance reporter Mark Hollingsworth to pitch a story about a troubled telecom deal Arora was involved in. The report was published in a British newspaper, The Independent, in October 2015.
Benedetti was also involved in the shareholder campaign, where he asked law firm Susman Godfrey LLP to represent him as an investor making claims about SoftBank and others. However, Susman Godfrey LLP declined to do so. Then Benedetti approached another law firm Boies Schiller Flexner LLP. Benedetti also arranged for Giannakopoulos to be the shareholder nominally behind the claims, but also stayed closely involved himself.
In January 2016, Boies Schiller Flexner LLP sent a public letter questioning Arora’s investments in Indian startups and asked SoftBank to Investigate the alleged conflicts of interest. Arora’s “past conduct also demonstrates his willingness to put his personal interests—and those of his partners—above those of the companies that have employed him as a senior executive,” the letter read. The company also sent more letters throughout 2016.
SoftBank’s Inside Story Finally Out
In May 2017, SoftBank started investigating the matter calling it a “sabotage”. The Japanese conglomerate cleared Arora of all allegations and that’s when Benedetti’s involvement came to light.
The Japanese conglomerate had instructed law firm Shearman & Sterling LLP to investigate the matter further and any possible connection between Benedetti and a SoftBank insider. However, the company dropped the investigation last year, without any substantial outcome.
But Arora decided to resign from SoftBank in June 2016, citing personal issues. However, as per WSJ report, Son and Arora had started to disagree on investments. Benedetti expected a cut from Misra’s earnings and to be named as the head of the Vision Fund in London in exchange for the favour, but this never happened.
The WSJ report highlighted that Benedetti got frustrated when Misra identified Sama as “another obstacle”. Meanwhile, the shareholders’ letter, before the investigation had begun, had started focusing on Sama as well.
Sama Became Another Target, Benedict Get Reward?
WSJ report noted that Misra was planning to leave SoftBank in mid-2016 as well before Arora resigned. But Misra was a frontrunner to lead the SoftBank Vision Fund in October 2016. However, Misra saw Sama as a hindrance, since he questioned some of Misra’s strategies to add debt to the Vision Fund.
Misra also asked two businessmen, who were looking to invest in SoftBank Vision Fund, in India to submit a complaint about Sama to government regulators in 2017. Soon after, Misra started leading investments from SoftBank Vision Fund I.
Besides that, Misra also tried to return Benedetti the favour by introducing him to Michael Klein, a former Citigroup banker with a thick Rolodex across Europe and the Middle East. Misra had urgest Klein to hire Benedetti to represent his firm M Klein & Co in Europe. The three reportedly met at the Hotel Baur au Lac in Zurich, where Benedetti pitched a series of telecom acquisition and asked Klein to provide his son with business contacts and advice.
“M. Klein & Co. has never had any business relationship or financial dealings with Alessandro Benedetti,” said a spokesperson from Klein.
