STREAMING NOW: Watch Now

SoftBank sticks with Saudis despite 'strong regret' over Khashoggi killing

Masa Son is sticking with Saudi Arabia.The CEO and founder of Japan's SoftBank (...

Posted: Nov. 5, 2018 9:46 AM
Updated: Nov. 5, 2018 9:46 AM

Masa Son is sticking with Saudi Arabia.

The CEO and founder of Japan's SoftBank (SFTBF) on Monday expressed "strong regret" over the killing of Saudi journalist Jamal Khashoggi, but said his company can't sever its financial ties to Saudi Arabia. He said SoftBank wouldn't take any more Saudi cash until the truth about the murder was known.

Business figures

Continents and regions

Masayoshi Son

Middle East

Middle East and North Africa

Saudi Arabia

Companies

SoftBank Group Corp

Technology

Jamal Khashoggi

Misc people

Business, economy and trade

Company activities and management

Company earnings

Financial performance and reports

Financial results

Banking, finance and investments

Financial markets and investing

The Japanese billionaire has built up strong ties with the Saudi government and Crown Prince Mohammed bin Salman. The kingdom provided nearly half the $93 billion that SoftBank raised for its Vision Fund, which has made investments in startups such as WeWork and Slack.

The killing of Khashoggi in the Saudi consulate in Istanbul was "a terrible incident that should never have happened," Son said Monday in his first public comments since an international outcry erupted over the journalist's death.

But SoftBank had "received funds to invest from the people of Saudi Arabia," Son added. As horrific as the killing was, the company believed it should "fulfill its responsibility for the future of the Saudi people," Son said during an earnings presentation in Tokyo.

Monday's statement showed that the Vision Fund is already giving a big boost to SoftBank's profits.

'Too early' to think about a new Saudi-SoftBank fund

Son had previously talked about establishing a second Vision Fund, an idea embraced by bin Salman. In May, Son said it would be set up in the "near future." But he played down those plans on Monday, saying it's "too early" to think about the next fund.

"New investment for future Vision funds will be considered after the truth is found out and an explanation is given," about Khashoggi's killing, he said.

The Vision Fund has pumped money into around 30 companies, turning Son into the new kingmaker of Silicon Valley. As well as raising money from Saudi Arabia and Abu Dhabi, the Vision Fund attracted other high-profile investors such as Apple (AAPL) and US chipmaker Qualcomm (QCOM).

Some analysts had expressed concern that firms may now shun Vision Fund investments because of the Saudi connection.

"There may be some impact, but so far I haven't heard that there are any companies that don't want to accept money because of [Vision Fund's] relationship with Saudi Arabia," Son said Monday.

Last week, two Silicon Valley startups announced that the Vision Fund had participated in their latest founding rounds.

"The long-run impact will likely depend on what SoftBank does after any investigations are concluded," said Dan Baker, an analyst with investment research firm Morningstar.

According to the company's earnings report Monday, the Vision Fund and a related fund brought in about 392 billion yen ($3.5 billion) in operating profit in the latest quarter, more than the rest of the company's other businesses combined.

The jump came from the sale of shares in Indian e-commerce firm Flipkart and increases in the values of chipmaker Nvidia (NVDA), hotel chain Oyo and other companies in which the fund has invested.

Article Comments

Eugene
Broken Clouds
47° wxIcon
Hi: 62° Lo: 43°
Feels Like: 45°
Corvallis
Clear
44° wxIcon
Hi: 60° Lo: 40°
Feels Like: 42°
Roseburg
Clear
52° wxIcon
Hi: 64° Lo: 45°
Feels Like: 52°
North Bend
Clear
45° wxIcon
Hi: 62° Lo: 44°
Feels Like: 43°
KEZI Radar
KEZI Temperatures
KEZI Planner

LATEST FORECAST

Community Events

 

 

 

Ask the Banker 

  Enter Contests