https://www.wsj.com/articles/softba...internal-rivals-11582743294?mod=djemalertNEWS
SoftBank’s Rajeev Misra Used Campaign of Sabotage to Hobble Internal Rivals
The man atop the world’s biggest tech fund paid an intermediary to smear them, people familiar with the matter say; a Misra spokesman said he did not orchestrate the effort
It was a career coup for Rajeev Misra. In 2017, the former banker, who had held a series of Wall Street jobs, was put in charge of one of the most formidable investing machines ever assembled.
His rise to the top of SoftBank Group 9984 -0.82% Corp.’s $100 billion Vision Fund isn’t a traditional tale of corporate ladder-climbing. He succeeded, in part, by striking at two of his main rivals inside SoftBank with a dark-arts campaign of personal sabotage.
The tactics included planting negative news stories about them, concocting a shareholder campaign to pressure SoftBank to fire them and even attempting to lure one of them into a “honey trap” of sexual blackmail, according to people familiar with the matter and documents reviewed by The Wall Street Journal.
At stake for Mr. Misra was the opportunity to be the right hand of Japanese billionaire Masayoshi Son, SoftBank’s founder. He would help Mr. Son spread billions across the tech world, funding highflying startups such as Uber Technologies Inc. —and, recently, stumbling with a big stake in WeWork. The fund would expand SoftBank’s already huge footprint, which included a telecom empire, a microchip designer and robot makers.
Mr. Misra’s targets were Nikesh Arora, who was once heir apparent to Mr. Son as chief executive, and Alok Sama, a deputy to Mr. Arora who grew to work closely with Mr. Son on big deals. Mr. Arora left SoftBank in 2016; Mr. Sama left last April.
“These are old allegations which contain a series of falsehoods that have been consistently denied,” a spokesman for Mr. Misra said. “Mr. Misra did not orchestrate a campaign against his former colleagues.”
A SoftBank spokeswoman said, “For several years, we have investigated a campaign of falsehoods against SoftBank Group and certain former employees in an attempt to identify those behind it. SoftBank will be reviewing the inferences made by The Wall Street Journal.”
To carry out the plan, Mr. Misra teamed with an Italian businessman who had worked with private intelligence operatives and computer hackers, according to people with knowledge of his past. At the outset in 2015, Mr. Misra paid the businessman, Alessandro Benedetti, $500,000, according to an email sent by Mr. Misra and to people familiar with the payment instructions. Several people said Mr. Misra or Mr. Benedetti told the associates millions more followed.
A spokesman for Mr. Misra said he denied paying for any campaign and said that the $500,000 transfer was for an oil investment.
Now Mr. Benedetti is upset that he hasn’t received compensation he believes he was promised, according to the people familiar with the matter. They said Mr. Benedetti expected Mr. Misra to name him a senior executive at the Vision Fund in London. No job ever materialized.
What lay behind the criticisms of Messrs. Arora and Sama at SoftBank has long been murky. Open shareholder letters called on the company to investigate the men’s business dealings. Journalists received screenshots of their private banking records. Complaints about the two executives were filed to U.S. and Indian financial regulators. Both men have denied any wrongdoing.
The Journal reported on the campaign against the men in May 2017. About a year later, a second Journal article revealed Mr. Benedetti’s involvement. It said SoftBank had instructed law firm Shearman & Sterling LLP to lead an investigation of the campaign and of any possible connections between Mr. Benedetti and a SoftBank insider. SoftBank ended the investigation in 2019 without getting to the bottom of the matter.
Meanwhile, in early 2018 a law firm working for Mr. Misra’s group at SoftBank, Paul, Weiss, Rifkind, Wharton & Garrison LLP, hired a private investigator, who told a Journal reporter the campaign was probably the work of a company SoftBank invested in. The Journal couldn’t verify that and didn’t publish it.
This account is based on interviews with people familiar with the campaign, including people close to Messrs. Misra or Benedetti, as well as on documents that show Mr. Misra provided information and funding.
Mr. Benedetti declined to comment. Two years ago, his lawyer said that Mr. Benedetti denied having “mandated or been party to any campaign” against SoftBank executives.
Messrs. Arora and Sama declined to comment.
Rajeev Misra, overseer of SoftBank’s Vision Fund.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
The campaign took shape in January 2015, when Mr. Misra, a former top banker at Deutsche Bank AG and UBS Group AG, had been at SoftBank for only a few months. Mr. Son hired him to play a role ironing out SoftBank’s finances.
Mr. Son had also poached Mr. Arora from a plum perch at Google and had given him a big job.
Mr. Misra and Mr. Arora often rubbed each other the wrong way. Mr. Arora, based in San Francisco and commuting to Tokyo, could be direct and sometimes abrasive, and he consolidated power fast, upsetting Japanese executives who had long held the reins.
Mr. Misra, in London, worked from offices of SoftBank-controlled Sprint, far from the core decision makers. Mr. Arora opposed a proposed investment in an Indian entertainment firm that was one of the first deals Mr. Misra championed.
A French banker named Bertrand des Pallieres, who knew both Mr. Misra and Mr. Benedetti, suggested the two meet, people familiar with the events said. According to these people, Messrs. Misra and Benedetti got together in London in early 2015, and Mr. Benedetti quickly agreed to participate in an effort to weaken Mr. Arora’s position at SoftBank.
The people said that Mr. Benedetti gave Mr. Misra a special cellphone to use for calls about the plan, and that the two sometimes met at London’s Bulgari Hotel.
How Mr. Benedetti would be compensated was left vague, but he developed the impression he would receive a cut of Mr. Misra’s earnings at SoftBank and could be made an executive at the firm if Mr. Arora was neutralized, according to people familiar with discussions Mr. Benedetti had with associates.
In April 2015, Mr. Misra sent $500,000 from his account at Standard Chartered Bank to Barkmere Group Ltd., a British Virgin Islands company controlled by Mr. Benedetti, according to documents reviewed by the Journal. People familiar with the transaction said it was to cover the campaign’s initial expenses.
That month, Mr. Benedetti sent a team to Tokyo to set up the so-called honey trap, in which one or more women would lure Mr. Arora to a hotel room rigged with cameras in an attempt to obtain compromising images, people familiar with the effort said.
The mission failed: Mr. Arora didn’t fall for the ploy.
Businessman Alessandro Benedetti during a meeting in Kyiv in October 2013.
PHOTO: OLEKSANDR SYNYTSYA/UNIAN
Around that time, Mr. Benedetti hired K2 Intelligence LLC, a private intelligence firm, to investigate Messrs. Arora and Sama and disseminate findings to the media, according to emails and people familiar with the hiring. He also recruited a Swiss private intelligence operative, Nicolas Giannakopoulos, to work on the campaign.
Mr. Giannakopoulos distributed to journalists screenshots of Mr. Arora’s and Mr. Sama’s private banking records and emails, according to messages reviewed by the Journal. Mr. Giannakopoulos didn’t respond to requests for comment.
K2 hired a London public-relations firm, Powerscourt Group, to try to get K2’s findings and information provided by Mr. Benedetti into the press. The operatives often referred to Mr. Arora by a code name, “Mr. West.”
In September 2015, Mr. Giannakopoulos, who goes by Nico, contacted a freelance reporter to pitch a story about a troubled telecom deal Mr. Arora played a part in. Reporter Mark Hollingsworth took the story to The Independent, a British newspaper. An email about this arrangement suggested the reporter would be paid if the story was published.
“The Independent is not a high quality newspaper so I’ve asked Nico only to offer a success fee,” David Robertson, then a K2 employee working on the campaign, wrote in an email to several people.
The Independent published the article October 2015. Mr. Hollingsworth said the notion he received a success fee was “completely and utterly false.”
A spokeswoman for The Independent said it expects journalists to adhere to “all applicable bribery and corruption laws.”
A spokeswoman for K2 said the firm doesn’t discuss clients or client matters. Powerscourt’s CEO said the same.
At SoftBank, the article and others that resulted were mostly seen as noise, people familiar with the internal reaction said. By November 2015, Mr. Benedetti was trying a new tack: a shareholder campaign. He asked law firm Susman Godfrey LLP to represent him as an investor making claims about SoftBank, Mr. Arora and others, emails show.
Nikesh Arora, left, with Masayoshi Son at a SoftBank event in October 2015, when Mr. Arora was a senior SoftBank executive and the target of a mysterious campaign of allegations.
PHOTO: KAZUHIRO NOGI/AGENCE FRANCE-PRESSE/GETTY IMAGES
The law firm declined to take the work, and Mr. Benedetti then went to Boies Schiller Flexner LLP. Mr. Benedetti arranged for Mr. Giannakopoulos to be the shareholder nominally behind the claims, but stayed closely involved, according to people familiar with the events.
In January 2016, a Boies Schiller lawyer sent a public letter questioning Mr. Arora’s investments in Indian startups and asking for an investigation of alleged conflicts of interest. Mr. Arora’s “past conduct also demonstrates his willingness to put his personal interests—and those of his partners—above those of the companies that have employed him as a senior executive,” the letter said.
More letters followed throughout 2016 from Boies Schiller and a law firm that succeeded it, prompting SoftBank’s board to launch an investigation into Mr. Arora, which found the allegations to be false. Over time, critical shareholder letters began to focus on Mr. Sama as well.
In June 2016, Mr. Arora resigned from SoftBank. He said he made the decision after Mr. Son chose not to give up his CEO post. Messrs. Son and Arora had begun to disagree on investments, said people familiar with the internal dynamics.
Mr. Benedetti saw the resignation as vindication of his strategy and expected Mr. Misra to pay him with a cut of deals and a job, according to people aware of his discussions with associates at the time.
They said he was frustrated when Mr. Misra identified Mr. Sama as another obstacle in his path to power. Mr. Sama’s profile rose higher in July 2016 when he helped Mr. Son negotiate to buy Arm Holdings for £24.3 billion.
Alok Sama in July 2016, when he was a finance executive who had helped SoftBank negotiate its purchase of Arm Holdings.
PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
Mr. Misra had all but given up, and was planning to leave SoftBank himself, in mid-2016 shortly before Mr. Arora resigned. Then, discussions about the planned Vision Fund investment initiative heated up. When SoftBank unveiled the fund in October 2016, Mr. Misra was front and center. He was named as the person overseeing the project.
Mr. Sama was proving a hindrance, questioning Mr. Misra’s strategies to add debt to the Vision fund. Mr. Giannakopoulos swung back into action with more letters, some of which went directly to Vision Fund investors.
SHARE YOUR THOUGHTS
What is your view of the management of SoftBank’s Vision Fund? Join the conversation below.
In addition, Mr. Misra asked two businessmen in India to submit a complaint about Mr. Sama to a government regulator, according to people familiar with the conversations.
Investors discussing putting money into the Vision Fund raised questions about Mr. Sama with SoftBank in spring of 2017, the Journal previously reported, for a time preventing Mr. Sama from further work on the Vision Fund.
At Mr. Misra’s direction, the Vision Fund soon was splashing out—investing $500 million to $3 billion at a time on dozens of startups in artificial intelligence, transportation, real estate and health care.
Mr. Misra tried to open a door that could lead Mr. Benedetti to deals or employment. In a June 2017 email, Mr. Misra introduced Mr. Benedetti to Michael Klein, a former Citigroup banker with a thick Rolodex across Europe and the Middle East. Mr. Klein was a banker Mr. Misra would soon bring on to advise SoftBank on its purchase of Uber shares and other potential deals, eventually paying him $6 million in fees.
“Michael look forward to seeing you tomorrow. I want to introduce you to mr. benedetti as a partner,” Mr. Misra wrote.
Mr. Misra later urged Mr. Klein to hire Mr. Benedetti to represent his firm M. Klein & Co. in Europe, according to people familiar with their discussions. In November 2017, the three of them met at the Hotel Baur au Lac in Zurich. The following fall, Mr. Benedetti pitched Mr. Klein on a series of telecom acquisitions. He also asked Mr. Klein to provide his son with business contacts and advice.
“M. Klein & Co. has never had any business relationship or financial dealings with Alessandro Benedetti,” a spokeswoman for Mr. Klein said.
Mr. Benedetti felt shortchanged. In recent months, his relationship with Mr. Misra has deteriorated. Associates of the Italian businessman said he has told them he recorded conversations in which Mr. Misra detailed his plans to weaken his SoftBank rivals.
—Alex Frangos contributed to this article.
SoftBank’s Rajeev Misra Used Campaign of Sabotage to Hobble Internal Rivals
The man atop the world’s biggest tech fund paid an intermediary to smear them, people familiar with the matter say; a Misra spokesman said he did not orchestrate the effort
It was a career coup for Rajeev Misra. In 2017, the former banker, who had held a series of Wall Street jobs, was put in charge of one of the most formidable investing machines ever assembled.
His rise to the top of SoftBank Group 9984 -0.82% Corp.’s $100 billion Vision Fund isn’t a traditional tale of corporate ladder-climbing. He succeeded, in part, by striking at two of his main rivals inside SoftBank with a dark-arts campaign of personal sabotage.
The tactics included planting negative news stories about them, concocting a shareholder campaign to pressure SoftBank to fire them and even attempting to lure one of them into a “honey trap” of sexual blackmail, according to people familiar with the matter and documents reviewed by The Wall Street Journal.
At stake for Mr. Misra was the opportunity to be the right hand of Japanese billionaire Masayoshi Son, SoftBank’s founder. He would help Mr. Son spread billions across the tech world, funding highflying startups such as Uber Technologies Inc. —and, recently, stumbling with a big stake in WeWork. The fund would expand SoftBank’s already huge footprint, which included a telecom empire, a microchip designer and robot makers.
Mr. Misra’s targets were Nikesh Arora, who was once heir apparent to Mr. Son as chief executive, and Alok Sama, a deputy to Mr. Arora who grew to work closely with Mr. Son on big deals. Mr. Arora left SoftBank in 2016; Mr. Sama left last April.
“These are old allegations which contain a series of falsehoods that have been consistently denied,” a spokesman for Mr. Misra said. “Mr. Misra did not orchestrate a campaign against his former colleagues.”
A SoftBank spokeswoman said, “For several years, we have investigated a campaign of falsehoods against SoftBank Group and certain former employees in an attempt to identify those behind it. SoftBank will be reviewing the inferences made by The Wall Street Journal.”
To carry out the plan, Mr. Misra teamed with an Italian businessman who had worked with private intelligence operatives and computer hackers, according to people with knowledge of his past. At the outset in 2015, Mr. Misra paid the businessman, Alessandro Benedetti, $500,000, according to an email sent by Mr. Misra and to people familiar with the payment instructions. Several people said Mr. Misra or Mr. Benedetti told the associates millions more followed.
A spokesman for Mr. Misra said he denied paying for any campaign and said that the $500,000 transfer was for an oil investment.
Now Mr. Benedetti is upset that he hasn’t received compensation he believes he was promised, according to the people familiar with the matter. They said Mr. Benedetti expected Mr. Misra to name him a senior executive at the Vision Fund in London. No job ever materialized.
What lay behind the criticisms of Messrs. Arora and Sama at SoftBank has long been murky. Open shareholder letters called on the company to investigate the men’s business dealings. Journalists received screenshots of their private banking records. Complaints about the two executives were filed to U.S. and Indian financial regulators. Both men have denied any wrongdoing.
The Journal reported on the campaign against the men in May 2017. About a year later, a second Journal article revealed Mr. Benedetti’s involvement. It said SoftBank had instructed law firm Shearman & Sterling LLP to lead an investigation of the campaign and of any possible connections between Mr. Benedetti and a SoftBank insider. SoftBank ended the investigation in 2019 without getting to the bottom of the matter.
Meanwhile, in early 2018 a law firm working for Mr. Misra’s group at SoftBank, Paul, Weiss, Rifkind, Wharton & Garrison LLP, hired a private investigator, who told a Journal reporter the campaign was probably the work of a company SoftBank invested in. The Journal couldn’t verify that and didn’t publish it.
This account is based on interviews with people familiar with the campaign, including people close to Messrs. Misra or Benedetti, as well as on documents that show Mr. Misra provided information and funding.
Mr. Benedetti declined to comment. Two years ago, his lawyer said that Mr. Benedetti denied having “mandated or been party to any campaign” against SoftBank executives.
Messrs. Arora and Sama declined to comment.
Rajeev Misra, overseer of SoftBank’s Vision Fund.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
The campaign took shape in January 2015, when Mr. Misra, a former top banker at Deutsche Bank AG and UBS Group AG, had been at SoftBank for only a few months. Mr. Son hired him to play a role ironing out SoftBank’s finances.
Mr. Son had also poached Mr. Arora from a plum perch at Google and had given him a big job.
Mr. Misra and Mr. Arora often rubbed each other the wrong way. Mr. Arora, based in San Francisco and commuting to Tokyo, could be direct and sometimes abrasive, and he consolidated power fast, upsetting Japanese executives who had long held the reins.
Mr. Misra, in London, worked from offices of SoftBank-controlled Sprint, far from the core decision makers. Mr. Arora opposed a proposed investment in an Indian entertainment firm that was one of the first deals Mr. Misra championed.
A French banker named Bertrand des Pallieres, who knew both Mr. Misra and Mr. Benedetti, suggested the two meet, people familiar with the events said. According to these people, Messrs. Misra and Benedetti got together in London in early 2015, and Mr. Benedetti quickly agreed to participate in an effort to weaken Mr. Arora’s position at SoftBank.
The people said that Mr. Benedetti gave Mr. Misra a special cellphone to use for calls about the plan, and that the two sometimes met at London’s Bulgari Hotel.
How Mr. Benedetti would be compensated was left vague, but he developed the impression he would receive a cut of Mr. Misra’s earnings at SoftBank and could be made an executive at the firm if Mr. Arora was neutralized, according to people familiar with discussions Mr. Benedetti had with associates.
In April 2015, Mr. Misra sent $500,000 from his account at Standard Chartered Bank to Barkmere Group Ltd., a British Virgin Islands company controlled by Mr. Benedetti, according to documents reviewed by the Journal. People familiar with the transaction said it was to cover the campaign’s initial expenses.
That month, Mr. Benedetti sent a team to Tokyo to set up the so-called honey trap, in which one or more women would lure Mr. Arora to a hotel room rigged with cameras in an attempt to obtain compromising images, people familiar with the effort said.
The mission failed: Mr. Arora didn’t fall for the ploy.
Businessman Alessandro Benedetti during a meeting in Kyiv in October 2013.
PHOTO: OLEKSANDR SYNYTSYA/UNIAN
Around that time, Mr. Benedetti hired K2 Intelligence LLC, a private intelligence firm, to investigate Messrs. Arora and Sama and disseminate findings to the media, according to emails and people familiar with the hiring. He also recruited a Swiss private intelligence operative, Nicolas Giannakopoulos, to work on the campaign.
Mr. Giannakopoulos distributed to journalists screenshots of Mr. Arora’s and Mr. Sama’s private banking records and emails, according to messages reviewed by the Journal. Mr. Giannakopoulos didn’t respond to requests for comment.
K2 hired a London public-relations firm, Powerscourt Group, to try to get K2’s findings and information provided by Mr. Benedetti into the press. The operatives often referred to Mr. Arora by a code name, “Mr. West.”
In September 2015, Mr. Giannakopoulos, who goes by Nico, contacted a freelance reporter to pitch a story about a troubled telecom deal Mr. Arora played a part in. Reporter Mark Hollingsworth took the story to The Independent, a British newspaper. An email about this arrangement suggested the reporter would be paid if the story was published.
“The Independent is not a high quality newspaper so I’ve asked Nico only to offer a success fee,” David Robertson, then a K2 employee working on the campaign, wrote in an email to several people.
The Independent published the article October 2015. Mr. Hollingsworth said the notion he received a success fee was “completely and utterly false.”
A spokeswoman for The Independent said it expects journalists to adhere to “all applicable bribery and corruption laws.”
A spokeswoman for K2 said the firm doesn’t discuss clients or client matters. Powerscourt’s CEO said the same.
At SoftBank, the article and others that resulted were mostly seen as noise, people familiar with the internal reaction said. By November 2015, Mr. Benedetti was trying a new tack: a shareholder campaign. He asked law firm Susman Godfrey LLP to represent him as an investor making claims about SoftBank, Mr. Arora and others, emails show.
Nikesh Arora, left, with Masayoshi Son at a SoftBank event in October 2015, when Mr. Arora was a senior SoftBank executive and the target of a mysterious campaign of allegations.
PHOTO: KAZUHIRO NOGI/AGENCE FRANCE-PRESSE/GETTY IMAGES
The law firm declined to take the work, and Mr. Benedetti then went to Boies Schiller Flexner LLP. Mr. Benedetti arranged for Mr. Giannakopoulos to be the shareholder nominally behind the claims, but stayed closely involved, according to people familiar with the events.
In January 2016, a Boies Schiller lawyer sent a public letter questioning Mr. Arora’s investments in Indian startups and asking for an investigation of alleged conflicts of interest. Mr. Arora’s “past conduct also demonstrates his willingness to put his personal interests—and those of his partners—above those of the companies that have employed him as a senior executive,” the letter said.
More letters followed throughout 2016 from Boies Schiller and a law firm that succeeded it, prompting SoftBank’s board to launch an investigation into Mr. Arora, which found the allegations to be false. Over time, critical shareholder letters began to focus on Mr. Sama as well.
In June 2016, Mr. Arora resigned from SoftBank. He said he made the decision after Mr. Son chose not to give up his CEO post. Messrs. Son and Arora had begun to disagree on investments, said people familiar with the internal dynamics.
Mr. Benedetti saw the resignation as vindication of his strategy and expected Mr. Misra to pay him with a cut of deals and a job, according to people aware of his discussions with associates at the time.
They said he was frustrated when Mr. Misra identified Mr. Sama as another obstacle in his path to power. Mr. Sama’s profile rose higher in July 2016 when he helped Mr. Son negotiate to buy Arm Holdings for £24.3 billion.
Alok Sama in July 2016, when he was a finance executive who had helped SoftBank negotiate its purchase of Arm Holdings.
PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
Mr. Misra had all but given up, and was planning to leave SoftBank himself, in mid-2016 shortly before Mr. Arora resigned. Then, discussions about the planned Vision Fund investment initiative heated up. When SoftBank unveiled the fund in October 2016, Mr. Misra was front and center. He was named as the person overseeing the project.
Mr. Sama was proving a hindrance, questioning Mr. Misra’s strategies to add debt to the Vision fund. Mr. Giannakopoulos swung back into action with more letters, some of which went directly to Vision Fund investors.
SHARE YOUR THOUGHTS
What is your view of the management of SoftBank’s Vision Fund? Join the conversation below.
In addition, Mr. Misra asked two businessmen in India to submit a complaint about Mr. Sama to a government regulator, according to people familiar with the conversations.
Investors discussing putting money into the Vision Fund raised questions about Mr. Sama with SoftBank in spring of 2017, the Journal previously reported, for a time preventing Mr. Sama from further work on the Vision Fund.
At Mr. Misra’s direction, the Vision Fund soon was splashing out—investing $500 million to $3 billion at a time on dozens of startups in artificial intelligence, transportation, real estate and health care.
Mr. Misra tried to open a door that could lead Mr. Benedetti to deals or employment. In a June 2017 email, Mr. Misra introduced Mr. Benedetti to Michael Klein, a former Citigroup banker with a thick Rolodex across Europe and the Middle East. Mr. Klein was a banker Mr. Misra would soon bring on to advise SoftBank on its purchase of Uber shares and other potential deals, eventually paying him $6 million in fees.
“Michael look forward to seeing you tomorrow. I want to introduce you to mr. benedetti as a partner,” Mr. Misra wrote.
Mr. Misra later urged Mr. Klein to hire Mr. Benedetti to represent his firm M. Klein & Co. in Europe, according to people familiar with their discussions. In November 2017, the three of them met at the Hotel Baur au Lac in Zurich. The following fall, Mr. Benedetti pitched Mr. Klein on a series of telecom acquisitions. He also asked Mr. Klein to provide his son with business contacts and advice.
“M. Klein & Co. has never had any business relationship or financial dealings with Alessandro Benedetti,” a spokeswoman for Mr. Klein said.
Mr. Benedetti felt shortchanged. In recent months, his relationship with Mr. Misra has deteriorated. Associates of the Italian businessman said he has told them he recorded conversations in which Mr. Misra detailed his plans to weaken his SoftBank rivals.
—Alex Frangos contributed to this article.
