Something doesn’t add up in Nikesh Arora’s sudden exit from SoftBank

Photo credit: Xbox store.

I had hoped to hand over the reins of SoftBank to him [Nikesh] 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.

This is what Masayoshi Son, chairman and CEO of SoftBank Group, said today in a shock announcement about Nikesh Arora, the heir apparent until today, resigning from his post as president and chief operating officer.

There’s more. “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 a friend of SoftBank, and I will have my hand on his shoulder,” the SoftBank chairman added.

And to this Nikesh added: “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.”

Something doesn’t add up.

Only yesterday, a special committee of members of SoftBank’s board of directors gave him a clean chit on charges of conflict of interest and “questionable transactions.” Nikesh had continued to be an advisor to American private equity firm Silver Lake even after joining SoftBank and overseeing billions of its investments.

Nikesh Arora. Photo credit: Loic Le Meur.

Son also came out with a statement after the charges were dismissed: “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.”

And yet, within a day, the SoftBank second in command called it quits.

The anointing of the heir

Only last year, Son had named Nikesh his successor. This followed a US$482 million investment in SoftBank by Nikesh from his personal savings.

“My past year with the SoftBank Group has been very rewarding. As a measure of my commitment, I have decided to take a personal bet on the SoftBank Group and ensure an alignment of vision, with our founder and chairman & CEO Masayoshi Son,” Nikesh had said then. “This is a large transaction for me, and involves taking an enormous risk in my life once again. However, I am extremely confident about the future of the SoftBank Group and the long-term objectives that we have set out.”

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