SoftBank CEO under fire for text messages on business turmoil
Someone should tell SoftBank CEO Masayoshi Son he could use encrypted apps like Signal and Telegram when communicating with his lieutenants.
Driving the news: Former WeWork CEO Adam Neumann won a Delaware court motion to remove redactions on select text messages between Son and Marcelo Claure, the SoftBank COO and WeWork executive chairman, as part of his lawsuit against SoftBank for bailing on its $3 billion tender offer for WeWork shares.
- The vast majority of tender proceeds would have gone to Neumann and WeWork investor Benchmark, which also is suing SoftBank.
The most explosive message was related to SoftBank's desire to delay the $3 billion payable in the tender by one month, which SoftBank had blamed on regulatory approval delays.
- Son texted Claure: "It’s great to postpone the close of tender... Use whatever excuse to make senses [sic]."
- Claure replied: "Ok. Will use antitrust. I am turning good at excuses like someone I know very well :)"
Another series of communication relates to WeWork's planned consolidation of its joint venture in China.
- SoftBank had claimed that WeWork's inability to close that transaction was one of the reasons it didn't complete the tender.
- But, the documents suggest that SoftBank was okay scuttling that deal because it instead devised a way to "gobble up" part of the $3 billion tender, thus making it economically whole on China.
Neumann's lawyers also continue to request 17,000 pages of additional "withheld documents."
What SoftBank spox is saying: “Cherry-picking quotes from documents doesn’t change the facts: under the terms of our agreement, SoftBank had no obligation to complete the tender offer in which Mr. Neumann — the biggest beneficiary — sought to sell nearly $1 billion in stock.”
What Neumann spox is saying: No comment.
The bottom line: SoftBank may win the legal argument that it was allowed to bail on the tender for any reason it wanted, and no one is crying for Neumann. But these new disclosures seem to reflect intentional deception, which could cost SoftBank future business.