Chinese billionaire Jack Ma resigns from SoftBank amid historic losses

Chinese billionaire Jack Ma resigns from SoftBank amid historic losses”

Tokyo:Alibaba Co-founder Jackma has stepped down from the board of Japanese conglomerate SoftBank Group after serving it for almost 13 years, the company announced on Monday. The announcements come ahead of what is widely expected to be an historically bad earnings report for the Japanese tech conglomerate.

In addition to Yanai's departure, power struggles inside SoftBank's $100bn Vision Fund past year led to the departure of Mark Schawrtz, the company's longstanding independent director.

Last month, SoftBank forecast a net loss of 900 billion yen ($8.4 billion) for its fiscal year. That investment was among SoftBank's most successful and the Japanese company still holds a 25 per cent stake worth around $136bn in the Chinese conglomerate.

That first buyback, announced in mid-March, initially failed to lift SoftBank's stock amid concerns the conglomerate's portfolio of startups is vulnerable to the economic shock from the coronavirus pandemic.

Chief Executive Masayoshi Son's strategy of fronting huge sums of cash and pushing for breakneck growth had already delivered two consecutive quarters of loss at the $100 billion fund before being upended by the coronavirus outbreak.

Operating losses for the year were 1.36 trillion yen, having forecast 1.35 trillion last month. Son invested $20 million in Alibaba in 2000 - a bet that turned into $60 billion when Alibaba went public in 2014.

Son's increasingly risky bets over the past few years coincided with departures from SoftBank's board of some of it most outspoken members.

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The coronavirus pandemic has dealt a severe blow to loss-making Vision Fund investments.

Aside from Ma's departure, three new board members were announced, including two external directors: Lip-Bu Tan, the founder of venture capital firm Walden International and CEO of a software and engineering services company, and Yuko Kawamoto, a professor with Waseda Business School.

The group has pledged the sale or monetisation of $41 billion in assets, in part to finance a 2.5 trillion yen buyback to prop up its share price. SoftBank's financial chief Yoshimitsu Goto was the third board appointment.

The company said on Friday that it had bought 250.6 billion yen of its own stock since March 13 under the original re-purchase plan, about half of the 500 billion yen budget.

The turmoil has given leverage to US activist shareholder Elliott Management, which in addition to recommending share buybacks is pushing for greater transparency and oversight.

Shares in SoftBank rose about 1.7% in Tokyo, outperforming the broader Nikkei 225, which was trading about 0.5% higher.

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