Saudi ties in focus as SoftBank’s Son makes first appearance since Khashoggi murder

Billionaire Masayoshi Son in Tokyo in July 2017. Photographer: Kiyoshi Ota/Bloomberg

Japan’s SoftBank Group Corp Chief Executive Masayoshi Son will face questions on Monday about his company’s dependence on Saudi Arabia, in his first public appearance since the murder of a journalist by Saudi security forces sparked global outrage.

Presenting SoftBank’s June-September earnings results, Son will also want to assuage concerns over the firm’s domestic telecoms business ahead of its mammoth IPO – potentially the world’s biggest – as the industry faces government pressure to cut prices.

While the results are expected to show solid profit and the Tokyo Stock Exchange is reportedly set to approve the telecoms listing next week, Son will be in the rare position of seeking to reassure investors about his strategy.

Saudi Arabia is the largest investor in SoftBank’s $93 billion Vision Fund, giving Son firepower to make big bets in late-stage startups such as shared office space provider WeWork Cos and hotel chain OYO hotels. But against the backdrop of the murder case, that dependence is now seen as a risk to SoftBank’s plans to raise further funds.

Jamal Khashoggi, a journalist critical of the Saudi state, was murdered early last month in the Saudi consulate in Istanbul. On Friday, Turkish President Tayyip Erdogan said the order to kill Khashoggi came from the “highest levels” of the Saudi government.

Son and other global executives cancelled speaking engagements at the kingdom’s investment conference in the weeks after the killing. Son is due to speak in Tokyo at 0700 GMT.

For now there are few signs SoftBank’s Saudi links are deterring startups from accepting Vision Fund capital, with internet-connected window company View on Friday announcing a $1.1 billion investment from the fund, saying the deal will allow it to accelerate growth plans.

Still, worries about the Saudi fallout and a broader downturn in global technology stocks have weighed on SoftBank shares in recent weeks. They closed on Friday at 8,699 yen, down almost 30 percent from September’s high of 11,500 yen.

Another recent concern has been the initial public offering (IPO) of SoftBank’s mobile phone network provider. Market participants said the offering could surpass the $25 billion worth of shares sold by China’s Alibaba Group Holding Ltd in New York in 2014, which in turn beat the $22 billion raised by Agricultural Bank of China Ltd in Hong Kong in 2010.

The IPO is widely expected to draw Japan’s cash-rich retail investors attracted to SoftBank’s image as a successful tech company and the prospect of steady returns.

Yet it comes as the steady profit the industry has enjoyed has been brought into question.

Facing government calls to lower prices, NTT Docomo Inc said last week it will cut service charges by as much as 40 percent, affecting its earnings from the next fiscal year.

Separately, competition is set to increase as e-commerce giant Rakuten Inc enters the mobile market in a year’s time with the help of a tie-up with telco KDDI Corp.

Also Read:

Undeterred by Saudi controversy, SoftBank Vision Fund invests $1.1b in window glass maker

It may be time for SoftBank to consider a future without Saudi money

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.