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SoftBank CEO Son to step down from Alibaba

Founder and chairman says $9bn annual loss was 'not a big problem'

SoftBank Group Chairman and CEO Masayoshi Son speaks during an annual general meeting on June 25 in Tokyo.

TOKYO -- SoftBank Group chairman and CEO Masayoshi Son said on Thursday he is retiring from the board of Alibaba Group Holding after nearly 15 years, marking a new chapter in his relationship with the Chinese e-commerce giant that has been his most successful investment.

Alibaba co-founder Jack Ma also retired from SoftBank's board after its annual shareholder meeting on Thursday. SoftBank shareholders approved the appointment of three new directors.

"I requested [to step down] in accordance with Jack's retirement," Son said at the end of the livestreamed meeting, adding that he was confident in the leadership of Daniel Zhang, Alibaba's current CEO. "Jack is graduating from us. I'm also graduating as Alibaba's director," Son said.

Ma and Son, two of Asia's richest corporate leaders, have been business allies since SoftBank invested about $20 million in Alibaba in 2000. SoftBank's roughly 25% stake in Alibaba was worth 16.2 trillion yen ($151 billion) as of Thursday, according to a SoftBank presentation.

SoftBank has the right to nominate one director to Alibaba's board if its holding remains above 15%.

SoftBank recently agreed to sell some of the stake to raise $11.5 billion as part of a $41 billion asset sale program, which also includes selling part of its holdings in U.S. carrier T-Mobile and its own Japanese mobile business.

During a livestreamed presentation, Son said SoftBank had made 80% progress on the program in just three months.

He also brushed off concerns about the technology conglomerate following a net loss of 961 billion yen for the year ended March, due to large investment losses at its $100 billion Vision Fund. It included a crisis at WeWork, the coworking office space company that had to call off plans for a stock market listing and needed a SoftBank bailout.

"Operating loss, net loss...for me, they're not a big problem," said Son, who owns about 27% of SoftBank, including shares held indirectly.

Instead, Son said what matters for SoftBank -- as an investment holdings company -- is that investments have bounced back and surpassed their pre-coronavirus values.

"The value of shares we own has recovered to 30 trillion yen," as of June 24, two trillion yen higher than at the end of March, Son said.

"During the recovery process, SoftBank's stock price halved. I think the market overshot to the downside," Son added. "I think it overreacted."

Son later read shareholders questions submitted through the company website. He fended off questions about boosting pay for some lieutenants, including Vision Fund chief Rajeev Misra, saying the person most responsible for the disastrous bet on WeWork was himself.

"Many people were against it. Some went mad and crazy. I talked back and we ultimately agreed," Son said. "I should be getting the biggest pay cut."

The CEO offered to take no pay, but was told by human resources that it would "cause problems." In the end, he said he donated his pay.

Son also responded to a complaint over its dividend being too low by saying that shareholders "should not hope for a dividend, at least for a while." The company has announced plans for a 2.5 trillion yen share buyback.

Last month, Son told investors that a number of Vision Fund bets were struggling in a "coronavirus valley" and acknowledged that some would not pay off.

On Thursday, he said he was still "confident in himself" and signaled that he is flexible on his pledge to retire in his 60s.

"I'm around 62 or 63 years old," he said. "I'll continue as CEO and chairman for another seven or eight years. By the time I'm 69, since medical science is advancing, I might say I'm roughly in my 60s and stay a little longer."

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