Internal feud at SoftBank casts doubt on Vision Fund

A background investigation of Marcelo Claure ordered in 2018 reveals tensions

National /
May.May 22, 2020 12:15 PM
Softbank's Marcelo Claure, Masayoshi Son and Rajeev Misra (Getty; iStock)

Softbank’s Marcelo Claure, Masayoshi Son and Rajeev Misra (Getty; iStock)

As SoftBank reports a loss of nearly $18 billion — the largest in its history — and prepares to sell off $42 billion in assets, a long-simmery internal feud is complicating matters further.

The tensions arose in 2018 between Marcelo Claure, now SoftBank’s Chief Operating Officer, and the chief of Softbank’s Vision Fund, Rajeev Misra, when Claure was under consideration for the fund’s board and investment committee, Bloomberg reported. In doing due diligence for the position, Misra’s reportedly team hired a Swiss firm to do a background check on Claure, which focused on his potential ties to money laundering and drug cartels in Bolivia. The investigation cleared Claure’s name, and found he didn’t have any illicit ties or criminal history — except for a bar fight in the 1990s — but the focus of the investigation angered Claure and heightened tensions at the firm.

A Vision Fund spokesman told Bloomberg that one of the fund’s limited partners, not Misra, requested the background check and Misra wasn’t involved in determining its focus.

Bloomberg’s reporting follows a February report by the Wall Street Journal that alleged that Misra orchestrated a campaign of sabotage against two other rivals at SoftBank, Nikesh Arora and Alok Sama. Misra allegedly leaked negative information about them and arranged an unsuccessful “honey trap” attempt against Arora in Tokyo. Misra has denied the allegations.

In addition to the cloak-and-dagger scandals, because the Vision Fund’s structure was not intended to withstand such volatility in the markets, some are questioning Misra’s leadership of the $100 billion technology fund. About $40 billion of the fund is in the form of preferred shares which pay out 7 percent to investors each year. Misra has defended his strategy for the Vision Fund, telling CNBC in March that the portfolio would recover within 18 to 24 months. (A spokesperson for SoftBank denied to Bloomberg that Misra made such statements.)

“Misra and Masa go back a long way, but gratitude should only last so long,” Justin Tang told Bloomberg, head of Asian research at United First Partners in Singapore. “If Misra is not the problem, he’s at least a big part of it.” [Bloomberg] — Georgia Kromrei


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