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SoftBank President Nikesh Arora Plans to Step Down SoftBank President Nikesh Arora Plans to Step Down
(about 5 hours later)
TOKYO — Nikesh Arora, a former Google executive who became president of SoftBank Group Corporation of Japan and was long seen as its eventual chief executive, will resign over what the company said was a disagreement about the timeline of when he would take over the technology conglomerate. TOKYO — A former Google executive and Silicon Valley star was on course to be the next chief executive of SoftBank of Japan, one of the world’s most prominent technology conglomerates. Now he is leaving, in an abrupt shakeout that shows cracks in SoftBank’s global ambitions.
The surprise disclosure late Tuesday in Japan comes after SoftBank had endured criticism from some shareholders over its strategy and over Mr. Arora’s conduct. SoftBank acquired a majority stake in Sprint Nextel of the United States for $21.6 billion three years ago, but it has since struggled to turn around the American wireless carrier. When the executive, Nikesh Arora, was poached two years ago from a coveted role as Google’s head of business operations, the hire was widely considered a coup for SoftBank. Its billionaire founder and chief executive, Masayoshi Son, crowned Mr. Arora heir apparent.
In a statement, SoftBank said that Mr. Arora had disagreed with the company’s powerful chairman and chief executive, Masayoshi Son, over when he would take control of various parts of the company. Mr. Arora was vaunted for his deal-making prowess and seen as an international executive who would help transform SoftBank with a flurry of investments. One of Mr. Son’s most cherished ambitions was to turn SoftBank, a Japanese business with some notable overseas names like the American carrier Sprint, into a truly global enterprise.
According to the statement, Mr. Son “had been considering Arora as a strong candidate for succession.” The honeymoon did not last.
“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 statement said. Investors have criticized Mr. Arora recently for his record of managing SoftBank’s overseas deals. Investments in start-ups like DramaFever and Housing.com, these shareholders have said, appear to have soured as the companies have faltered.
“The difference of expected timelines between the two leads to Arora’s resignation” as a director, the statement added. And the carefully orchestrated succession plan — or what appeared to be — has collapsed. Mr. Son decided he was not ready to give up the reins soon.
Mr. Arora could not immediately be reached for comment. On Twitter, he characterized his departure as amiable. Mr. Son, 58, said in a statement that he still wanted to “work on a few more crazy ideas” at SoftBank. Mr. Son cited differences over when Mr. Arora would take over as chief executive as the reason he had agreed to step down. Mr. Arora, who was born in India, holds the titles of president and chief operating officer.
The announcement of Mr. Arora’s departure comes just a day after SoftBank said an internal panel had rejected claims of misconduct by Mr. Arora. The statement did not describe those claims. News reports have said that they pertained to a potential conflict of interest over Mr. Arora’s role as an adviser for the private equity firm Silver Lake. “This will require me to be C.E.O. for at least another five to 10 years — this is not a time frame for me to keep Nikesh waiting for the top job,” Mr. Son said.
Mr. Arora’s departure was also announced shortly after SoftBank said it would sell its majority stake in Supercell, a maker of games for mobile devices, to Tencent Holdings of China for about $8.6 billion. Mr. Arora, 48, also presented the parting as amicable. “Masa and I are still in love with each other,” he posted on Twitter. “I will support everyone I invested in, and they know that.”
Mr. Arora’s legacy — good or bad — will ultimately be determined by his investment record.
SoftBank’s strategy is centered on acquiring other companies, from established businesses to tiny start-ups. Shortly before Mr. Arora arrived, SoftBank bought Sprint for $21.6 billion, a major expansion of Mr. Son’s empire overseas. The Japanese conglomerate also made a fortune when its early investment in the Chinese internet company Alibaba slowly swelled to billions of dollars in value.
After joining SoftBank, Mr. Arora was put in charge of picking takeover targets around the world. His mandate was to diversify a company that, despite the Sprint acquisition and others, still makes about 70 percent of its operating profits in its home market. It owns a major mobile phone network and a controlling interest in Yahoo Japan, among other domestic assets.
Mr. Arora struck more than a dozen deals, placing bets on technology, telecommunications and media companies in India, Indonesia and Singapore, among other countries. SoftBank paid $1 billion for a stake in the Korean e-commerce company Coupang. It plowed $250 million into WME-IMG, the giant American media and sports agency. India has been a particular focus, and Mr. Arora led investments into businesses like Snapdeal and OYO Rooms, which aspire to be its Amazon and Airbnb.
Recently, SoftBank has been selling assets and raising cash, a pattern that has been a prelude to big, strategic deals. On Tuesday it sealed an agreement to sell its majority stake in Supercell, the developer of “Clash of Clans” and other mobile games, to China’s Tencent Holdings for about $8.6 billion. It also recently sold about $10 billion of shares in the Chinese internet search giant Alibaba.