SoftBank Group Corp.’s biggest investors are putting pressure on the tech conglomerate over its governance and for a string of bad investments in its $100 billion investment fund.
Investors including Capital Group, hedge fund Tiger Global Management LLC and Southeastern Asset Management Inc. have privately criticized the company over losses in the Vision Fund in recent weeks, people familiar with the matter said.
The investors have also criticized SoftBank’s 9984, +0.93% plan to help raise cash for a second Vision Fund by lending billions of dollars to its own executives, the people said. The Wall Street Journal reported in August that SoftBank planned to lend up to $20 billion to Chief Executive Masayoshi Son and other top executives to invest in the fund, helping a fundraising effort that has stalled.
In conversations with SoftBank executives and investor-relations staff, those shareholders and others — including AllianceBernstein LP and Odey Asset Management — have criticized the loans as risky and said they could create conflicts of interest between the executives and investors. In addition to Son, the borrowers include several SoftBank board members who also hold senior roles at the Vision Fund. The company hasn’t disclosed details of the arrangement to investors.
Capital Group — one of SoftBank’s largest shareholders with a 2% stake as of Sept. 30 — and AllianceBernstein AB, -0.55% have told SoftBank executives that Son shouldn’t participate in the loan program, people familiar with the matter said. Tiger Global complained about corporate governance rather than SoftBank’s investments, a Tiger Global spokeswoman said. Some investors shared their concerns during meetings with Son and Navneet Govil, the Vision Fund’s finance chief, at the company’s quarterly earnings presentation last month, some of the people said.
An expanded version of this report appears on WSJ.com.
Also popular on WSJ.com.
Corporate executives try to assess potential impact of tax change proposals.
Silicon Valley adjusts to new reality as $100 billion evaporates.