SoftBank Shuns Elliot Management's Call For Board Oversight Of Vision Fund

SoftBank Group Corp SFTBY will not heighten board oversight of its Vision Fund despite the demands of the activist investor Elliot Management. 

What Happened

The $100 billion Vision Fund is in the crosshairs of Elliot Management, which wants the Japanese group to create a subcommittee at the board level to supervise the fund’s investment process, according to Reuter’s sources. 

SoftBank is resisting the Elliot Managemen demands arguing that the fund’s investments have already been cleared by top executives, and $3-5 billion deals have been given the go-ahead by large limited partners. 

Why It Matters

The Vision Fund’s losses spanning investments such as WeWork and Uber Technologies Inc UBER amounted to $16.5 billion in the financial year ended March 2020.

SoftBank is also said to be looking to end its association with Wirecard AG WRCDF, a company under investigation by the European Union after $2.1 billion went missing from its books.

The poor performance of the fund has halted fund-raising efforts from large investors such as sovereign wealth funds of Saudi Arabia and Abu Dhabi, noted Reuters.

SoftBank CEO Masayoshi Son has the final word on investments but is aided by managing partner Saleh Romeih and the fund’s head Rajeev Misra, a former Deutsche Bank AG DB investor.

Son has vowed to undertake governance reforms, including improving oversight of the fund’s portfolio firms and putting to end bailouts for stragglers. 

Newly introduced reforms include the formation of a nominating and remuneration committee, which is chaired by an outside director.

The committee is also tasked for finding a successor to Son, who has said he may continue leading the Japanese conglomerate into his seventies. 

Price Action 

SoftBank OTC stock closed 0.33% higher at $45.83 on Thursday.

Image: SoftBank