Moneycontrol
May 19, 2017 02:52 PM IST | Source: Moneycontrol.com

Softbank Corp vehemently denies allegations of corruption in India investments

The development comes at a time when Softbank has concluded $1.4 billion deal in Paytm and is also leading a very crucial merger of one of its portfolio companies Snapdeal, with larger rival Flipkart

Softbank Corp vehemently denies allegations of corruption in India investments

Moneycontrol News

Almost a year after Nikesh Arora, the heir apparent to the chief executive officer's role at Softbank Group Corp quit the firm, allegations by of misdealings at the Japanese company have re-surfaced by anonymous stakeholder groups.

In a report published by The Wall Street of Journal, "current or former executives" at Softbank have been alleged by an anonymous stakeholder to have received kickbacks connected with investments made in 2016, especially in India.

The stakeholders who have raised the issue have chosen to be anonymous and are represented by their attorneys. The report says that a complaint was submitted in this regard to an Indian financial regulator.

The development comes at a time when Softbank has concluded USD 1.4 billion deal in mobile payments firm Paytm in India. On the other hand, it is also leading a very crucial merger of one of its portfolio companies Snapdeal, with larger rival Flipkart.

Besides Snapdeal and Paytm, Softbank has also invested in realty portal Housing.com which was merged with rival PropTiger earlier this year. Cab aggregator Oyo, budget hotel accommodation provider Oyo and online grocery startup Grofers are some of its other investments in India.

Last year, Softbank also faced an inquiry under which the US regulators examined the firm over allegations by stakeholders about Arora's activities, according to media reports.

It was being seen if Arora had conflicts of interest besides Softbank's disclosures to investors.

The special committee cleared Arora of any misconduct calling the claims as without merit. Ironically, Arora's resignation came right a day after.

Softbank however has vehemently denied allegations of any such misdealings with regards to its startup investments in India.

Here is the complete statement from Softbank on the allegations:

"We are aware that certain individuals are waging a malicious smear campaign against Softbank and its senior executives through a series of defamatory letters. These submissions are based on falsehoods and innuendo, littered with inaccuracies and are a blatant attempt to damage SoftBank’s reputation and that of its respected executives.

SoftBank has investigated the matters raised in these letters comprehensively and with the help of counsel, and found these so called allegations to be baseless and entirely without merit.

The firm has even alleged that an individual by the name of Nicholas Giannakopoulos, who is based out of Switzerland is likely to be behind this campaign.

A certain individual in Switzerland, Nicholas Giannakopoulos, claiming to be a shareholder of SoftBank, appears to be fronting this campaign. While SoftBank has the deepest respect for the rights of shareholders to raise legitimate concerns, we will not allow ourselves or our executives to be victims of a shameless intimidation scheme.

It also said that Softbank has filed a criminal complaint against this individual with the public prosecutor’s office in Geneva on December 23, 2016. We will not hesitate to take further action to protect its interests," an official statement from Softbank to Moneycontrol said.

In a recent filing this month, Softbank wrote off USD 1.4 billion as valuation loss from Snapdeal and Ola investments for FY17.
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