Just a day after SoftBank gave a clean chit to its president Nikesh Arora, today, in a tweet, the former Google executive stated that he will step down.
Masa 2 continue 2 be CEO for 5-10 years, respect that. Learnt a lot. Clean chit from board after through review. Time for me to move on.
— Nikesh Arora (@nikesharora) 21 June 2016
In a statement on Monday, Softbank had said, “The Special Committee has concluded that the claims concerning the conduct of Arora during his tenure at SBG are without merit.” A committee was formed in February which conducted the review with the assistance of independent counsel at Shearman & Sterling and Anderson Mori & Tomotsune.
According to a new release issued by Softbank today, Arora, representative director, President and Chief Operating Officer of SBG, will assume an advisory role, effective July 1. Masayoshi said that he will continue to be the be CEO for another five to ten years.
Masayoshi Son, Chairman & CEO of SoftBank Group Corp. commented, “Nikesh and I have been partners in creating SoftBank 2.0. He has been able to help think through our vision, future growth plans and articulate the SoftBank strategy. He brought world class execution skills to SoftBank, as evidenced in our myriad of investments over the last year, as well as the complex monetisation of our Alibaba stake, and most recently our successful sale of Supercell. I am indebted to him for his contributions.”
“Nikesh is a unique leader with unparalleled skills around strategy and execution. He should be CEO of a global business, and I had hoped to hand over the reins of SoftBank to him on my 60th birthday, but I feel my work is not done. I want to cement SoftBank 2.0, develop Sprint to its true potential and work on a few more crazy ideas,” he added.
Commenting on the decision, Nikesh said, “Helping Masa begin the transformation of SoftBank and sowing the early seeds has been a great experience. I have enjoyed working with Masa and the SoftBank team and I look forward to my next challenge. In the meantime I will continue to support SoftBank and our investee companies.”
Earlier this year, in a 11-page complaint, a group of investors in Japanese telecoms & internet giant SoftBank Group had requested the board to investigate Nikesh Arora’s track record and qualifications as president and heir to billionaire founder Masayoshi Son.
The complaint outlined a conflict in interest on Nikesh’s accord as he is a senior adviser in private equity firm Silver Lake. It also suggested that he was involved in past wrongdoings, poor business decisions, and a series of questionable transactions. Lastly, it points out that SoftBank is paying an excessive compensation to Arora without sufficient disclosure.
Another letter from one investor to the board of Sprint Corp., which SoftBank controls, has asked for Arora’s removal as a director citing similar reasons.
The letter, dated January 20, said that if the boards of SoftBank and Sprint do not announce an investigation within 60 days the investors intend to pursue other remedies, including potential legal action and giving information to government regulators. The 60-day period ended in March.
Nikesh had joined SBG from Google, where he was the Chief Business Officer, in September 2014. During his tenure, SBG invested in a set of groundbreaking growth-stage companies in India like Snapdeal, Ola, Oyo, Grofers, Housing and extended its footprint in Asia successfully with the mobile ecommerce company Coupang in Korea and the ride share player Grab in Southeast Asia. SBG started building its portfolio in the US with interesting investments like SoFi, a fintech company that’s taking a radical approach to lending and wealth management, and Banjo, which utilises data analytics.
In May 2015, SoftBank Corp appointed Nikesh Arora as its new president. Besides, SoftBank’s founder and chairman Masayoshi Son also anointed Nikesh Arora as his possible successor.
Recently, the company sold a small part of its shareholding in Alibaba Group to reduce leverage and improve financial health over the long term. SBG entered an agreement to sell its stake in Supercell for a total return of $7.3 Bn.