Short and sweet

THE unpredictable ways of “Masa” Son, the founder of SoftBank, a Japanese telecoms and technology firm, are well known in Japan. Even so, the news that he would immediately part company with Nikesh Arora, a former Google executive he named just over a year ago as his successor, was a shock. “He and I love each other,” gushed Mr Arora in one of a hail of explanatory tweets afterwards. Circumstance would suggest otherwise.

SoftBank’s official reason for Mr Arora’s resignation is that Mr Son decided he wanted to carry on as chief executive for another five years or more. Mr Arora wanted to take over sooner. But his brief record at the company must have had something to do with his departure.

Mr Son believed his protégé’s connections in Silicon Valley could land him the right tech deals. Mr Arora’s investment spree include a $1 billion punt on Coupang, a loss-making South Korean unicorn. Hundreds of millions also went into an array of cash-bleeding ride-hailing firms in Asia, including India’s Ola. But the mood has shifted. Now SoftBank’s activities are widely viewed as symptoms of the frothiness and mania that have gripped the tech sector.

Mr Arora’s free rein to back startups particularly annoyed shareholders. One group of disgruntled investors led a campaign to oust him. They judged his continued role as an adviser to Silver Lake, an American technology-investment firm, to cause a conflict of interest. When they listed their complaints earlier this year, Mr Son pledged “complete trust” in Mr Arora. On June 20th, a special committee of SoftBank board members concluded that the various complaints were “without merit”. Yet a day later he resigned.

Mr Arora’s rapid rise had also irked the executives who helped Mr Son build his cash-generating mobile-telecoms empire after buying Vodafone’s struggling Japanese mobile unit in 2006. A particular issue was Mr Arora’s pay. In the 2014 fiscal year he took home ¥16.5 billion ($156m), and last year he pocketed ¥8 billion, in a country in which bosses receive on average around ¥100m a year.

Mr Son’s gamble on Mr Arora was one of two big recent bets. The other was the acquisition of Sprint, an ailing American telecoms firm that SoftBank bought for $22 billion in 2013. Mr Son is taking steps to reduce risk by selling assets and paying down some of the debts his firm has accumulated, in part through buying Sprint. SoftBank has agreed to sell some of its stake in Alibaba, a Chinese e-commerce giant, for $10 billion, and is to dispose of a stake in Supercell, a Finnish game developer.

Mr Son will now need to decide what to do about SoftBank’s internet-investment strategy. With the aid of Mr Arora, he had planned to invest as much as $10 billion over the next decade on startups in India, the country of Mr Arora’s birth. After his anointed successor’s premature exit, Mr Son will struggle to attract another plugged-in technology superstar to Tokyo. His shareholders may not be too sorry.