Masayoshi Son On The Hook Of $5.2 Billion On Account Of Side Deals At SoftBank

Masayoshi Son’s side deal and venture capital, Vision Fund, costs him around 5.2 billion dollars for the losses, which he now owes to the SoftBank Group Corp.

The last financial year brought down Vision Fund to a record loss with 4.3 trillion yen. Further, Q4 of FY22 recorded a setback of approximately 2 billion dollars (297.5 billion yen).

Son observed a differential setback of 130 millions dollars between Q3 and Q4 of FY22. The Latin America Fund was found to be the main culprit behind most of the unrealized losses of the Chief Executive Officer and Founder of SoftBank.

Proofread & Published By Naveenika Chauhan

Moreover, the December fiscal quarter witnessed Son losing out 5.1 billion dollars on Tongfang deal.

The Japanese billionaire witnessed his Q3 FY22 Portfolio losses dwindling from Vision Fund 2 interest of 2.9 billion dollars to 463 million dollar from SoftBank Latin America Fund and 1.8 billion dollars deficit involving SB Northstar.

Some portions of the key investment vehicle of SoftBank as well as its stakes are owned by Masayoshi Son, which has induced the attention of the corporate governance and sparked controversies yet such allegation have been denied by Son.

The controversial side venture of SoftBank, SB Northstar, notices a holding of 33 per cent stakes by 65 year old Masayoshi Son. Whereas, one of the unit of the company’s Latin America Fund and unlisted holdings of the Vision Fund 2 both represent 17.25 per cent stake by the debt owed billionaire.

The comprehensive debt which has stuck Masayoshi Son is 5.2 billion dollars according to company disclosures.

Son had set up the capital business proudly in 2017 as a technology focused investment fund.

However, its portfolio mentioned some unlisted startups which capped the firm with dismal earnings, even though the equities found a global rebound.

The market opening of May 12 saw a drop in stock trading in Tokyo to about 5.5 per cent. This is deemed to be the highest fall in two months. The buyback option which the investors sought after the market crash also did not materialize.

The rising interest rates along side a drop down in the valuation of technology companies caused headwinds in the Japanese investment giant SoftBank’s flagship investment division, the Vision Fund.

Amid the defensive mode and the disciplined investments, Masayoshi Son’s tech giants are going through a difficult fiscal year.

In order to raise cash, SoftBank had been spotted to exit some of its high profile investments including Alibaba and T-mobile. 

Son had been successful in his early investment in Alibaba over 20 years ago and now SoftBank had sold its shares involving the Alibaba group through a forward contract.

All in all, the Vision Fund was found to be suffering a deficit of 32 billion dollars (4.3 trillion yen) in the 2022 Financial Year ending.

In the same line, SoftBank lost about 5.28 trillion yen as a gross loss at its Vision Fund segment, which counts in its net loss of 970.14 billion yen for FY22.

CEO Yoshimitsu Goto commented that SoftBank had invested in well capitalized companies, and some companies have valuation of 37 billion dollars which are yet to go into public.

Masayoshi Son’s top executive cum business partner, Rajeev Misra, who played a key role in the development of Vision Fund in 2017, gave up on most of his roles in the Japanese giant, after the debt issues rolled out.

No deadline has been set on Masayoshi Son for the restitution as such.

In spite of all the criticism and outstanding payments, the future position of Masayoshi Son has decent scope of recovery.

To pay off the debt in SB Northstar, some assets and cash have already been deposited by the technology entrepreneur. The unfunded repayment obligations would be cleared off at the maturity date of the fund, which is 12 years with a supplement of two years.

After scraping out the stipulated financial obligations from Vision Fund 2, SB Northstar, and the Latin American Fund, the net worth of Masayoshi Son on 11 May was found to be 8.9 billion dollars.