Alibaba reshuffles the board as Jack Ma moves on to philanthropy

By Rahul Vaimal, Associate Editor
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SoftBank will introduce three new appointments to the board, including group Chief Financial Officer Yoshimoto Goto, at its annual general meeting on June 25. The number of board members will expand to 13.

SoftBank Group has declared revisions to its board, including the resignation of long-time director Jack Ma and co-founder of Alibaba Group Holding who will now leave formal engagements to focus on philanthropy. Three new directors have been chosen, including Chief Financial Officer Yoshimitsu Goto. The Japanese multinational conglomerate with investments all over the globe will also double the volume it plans to spend buying back shares.

The company plans to repurchase as much as 500 billion yen (Dh17.2 billion / $4.7 billion) worth of its own stock by March 2021. An equally sized repurchase had been announced in mid-March. SoftBank shares rose more than 2 percent.

SoftBank, led by founder Masayoshi Son, is buying back shares to support its stock price after its collection of startup ventures lost value. The company anticipates booking a record 1.35 trillion yen operating loss for the year ended March 31 when it reports financial results in Tokyo. After aggressively funding startups in recent years, SoftBank is marking down the value of stakes in companies such as WeWork, Oyo Hotels and Uber.

SoftBank Founder and Chairman Masayoshi Son and Alibaba Group Holding Co-founder Jack Ma at Tokyo University in 2019 (Photo by Ken Kobayashi)

The company said 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. That first buyback, declared in mid-March, initially disappointed to lift SoftBank’s stock amid concerns the conglomerate’s portfolio of startups is exposed to the economic shock from the coronavirus pandemic. When the shares plunged more than 30 percent in the week that followed, Mr. Son took an unprecedented step to unveil a broader plan to repurchase as much as 2 trillion yen, without detailing the timing. The latest report is part of that broader plan.

The stock gained almost 70 percent since SoftBank said it plans to sell assets to raise as much as 4.5 trillion yen over the coming year to buy shares and slash debt.

The company’s Vision Fund business focused on technology investments that provided more than half of its reported profit a year ago, has swung to a projected 1.8 trillion yen loss. The company’s overall net loss will likely reach 900 billion yen.

Mr. Ma’s departure is a historic moment since he and Mr. Son have sat on each other’s boards for years. Alibaba is regarded as Mr. Son’s most successful investment. In addition to Mr. Goto, a long-time SoftBank veteran, Lip-Bu Tan and Yuko Kawamoto will join, bringing the total of external board members to four.

Mr. Tan is a Founder and Chairman of Walden International, a venture capital firm based in San Francisco, and Chief Executive of Cadence Design Systems. He holds a master’s degree in nuclear engineering from the Massachusetts Institute of Technology and received an MBA from the University of San Francisco.

Ms. Kawamoto is a professor at Waseda University whose subjects encompass corporate governance. She holds a bachelor’s degree in social psychology from the University of Tokyo, a master’s degree in development economics from Oxford University and spent years working at McKinsey. Ms Kawamoto will be SoftBank’s sole female board member.