TOKYO (Reuters) – SoftBank Group Corp said on Monday that Alibaba co-founder Jack Ma resigned from his board, in the last match by a prominent ally of CEO Masayoshi Son.
ARCHIVE PHOTO: Jack Ma, president of the Alibaba Group, attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, on January 23, 2019. REUTERS / Arnd Wiegmann / File Photo
The departure of Ma, who retired as Alibaba's executive chairman in September, comes when he retires from formal business roles to focus on philanthropy.
SoftBank will propose three new appointments to the board, including group chief financial officer Yoshimoto Goto, at its annual general meeting on June 25. The number of board members will be expanded to 13.
SoftBank will also propose the election of Lip-Bu Tan, CEO of chip design software company Cadence Design Systems, who is also chairman of venture capital firm Walden International, and Yuko Kawamoto, professor at Waseda Business School as external directors . Kawamoto will become his only woman on the board.
This meets the demand of activist investor Elliott Management, who pressed SoftBank to improve the diversity of the board, and also wants a new subcommittee to oversee the $ 100 billion investment in the Vision Fund.
Son's top-down management style is under increasing scrutiny, with the fund expected to report its third consecutive quarterly operating loss as early as Monday, plunging the group as a whole into a record loss.
The board is largely composed of members and confidants of SoftBank. Includes Yasir al-Rumayyan, who runs the Saudi Arabian sovereign wealth fund, which is the largest external sponsor of the Vision Fund.
“Who is the voice of reason that can face the Son? You probably need more than one, ”said Nicholas Benes of the Japan Board Board Training Institute, a nonprofit organization focused on corporate governance training.
"I doubt that these four external directors, on a board of 13, have much effect in slowing Son down before the next agreement with WeWork," he added, referring to SoftBank's sour bet on the office sharing startup.
Ma's departure follows the departure of Tadashi Yanai, founder and CEO of Fast Retailing, the parent company of Uniqlo, who resigned from the board at the end of last year to focus on his fashion business.
Separately, SoftBank said the board approved a second installment of 500 billion yen ($ 4.7 billion) in stock purchases, part of a 2.5 trillion yen buyback program announced in March to raise the price of the group's shares as their technological bets decrease.
SoftBank bought back more than 250 billion yen of its shares at the end of April. The company has promised to sell or monetize $ 41 billion in assets to raise money, with its stake in Alibaba – the most valuable asset in the portfolio – seen as a likely target.
($ 1 = 107.17 yen)
Reporting by Sam Nussey; Editing by Edwina Gibbs and Stephen Coates