Softbank president Nikesh Arora resigns as Son wants to continue as CEO

SoftBank Group (SBG) President Nikesh Arora has decided to resign effective 22 June, over purported differences with the company's Chairman & CEO Masayoshi Son.

Surprisingly, the announcement has come a day after the company on Monday said a special committee found the allegations against him in a purported shareholder demand are 'without merit'.

The company said Arora's resignation from the position of Representative Director and Director of SBG will become effective with the expiration of the term of office at the conclusion of the 36th Annual General Meeting of Shareholders scheduled on 22 June (Wednesday).

"Masayoshi Son, Chairman & CEO of SBG, had been considering Arora as a strong candidate for succession. Son’s intention was to keep leading the Group in various aspects for the time being, while Arora wished to start taking over the lead in a few years’ time. The difference of expected timelines between the two leads to Arora’s resignation from the position of Representative Director and Director of SBG with the expiration of the term of office and his next steps," said a short statement from the company.

 Softbank president Nikesh Arora resigns as Son wants to continue as CEO

Nikesh Arora

“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 monetization of our Alibaba stake, and most recently our successful sale of Supercell. I am indebted to him for his contributions,” Son was quoted as saying in a press release from the company.

“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. This will require me to be CEO for at least another five to ten years - this is not a time frame for me to keep Nikesh waiting for the top job.”

“Nikesh and I have decided that he would move to an advisory role and continue to support SoftBank, while he zeroes in on his next challenge. He will continue to be friend of SoftBank, and I will have my hand on his shoulder.”

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.”

Arora has been in the eye of a storm after a clutch of Softbank investors wrote to the company seeking an investigation into some of the deals struck by the high-profile executive and even sought his possible dismissal.

A Bloomberg report had earlier said a 11-page letter signed by Matthwew Schwartz, a partner at Softbank, was sent to Softbank raising questions about Arora's conflict of interest as he is also the senior adviser to private equity firm SilverLake.

An investor in Sprint Corp, controlled by Softbank, also sought his removal from position at the Japanese company.

However, a committee constituted by Softbank had cleared him of all allegations on Monday.

"A special committee of independent members of SBG's Board of Directors has completed its review of allegations regarding SBG President and Chief Operating Officer Nikesh Arora in a purported shareholder demand. The special committee has concluded that the claims concerning the conduct of Arora during his tenure at SBG are without merit," the company said in a statement.

"As I said when these allegations first became public, I have complete trust in Nikesh and I am pleased the special committee has looked into these claims thoroughly and concluded they are without merit," said CEO Masayoshi Son.

The committee was formed in February of this year. It conducted its review with the assistance of independent counsel at Shearman & Sterling LLP and Anderson Mori & Tomotsune, it said.

Softbank statement on Nikesh Arora

In a series tweets Arora said he plans to continue as advisor with SoftBank group for one more year and also that Son will contineu to be CEO for 5-10 more years.

Updated Date: Jun 21, 2016 19:35:55 IST