‘I say no’: meet Masayoshi Son’s financial guru at SoftBank

Minutes into conducting a job interview for SoftBank’s finance head in the summer of 2000, founder Masayoshi Son made a characteristically quick decision: “I like the look of his eyes. Let’s hire him.”

He had chosen to hire Yoshimitsu Goto, his fiercely loyal finance guru who is now at the centre of SoftBank’s gruelling battle against the global tech rout that has plunged the conglomerate to a $23bn loss.

Over the past 18 months, Son has lost three of his top lieutenants and potential SoftBank heirs, including chief operating officer Marcelo Claure and strategy chief Katsunori Sago. Rajeev Misra, head of SoftBank’s $100bn Vision Fund and the architect of the group’s complex financing engineering, has also stepped back to set up his own fund.

Though not a candidate to take over Son’s investment empire, Goto is an exception to that revolving door of executives. He has become indispensable as the link between the highly leveraged group and the world’s biggest banks. SoftBank’s planned US listing of UK chipmaker Arm is just one of his challenges, with Son announcing this week that he is exploring tie-up talks with Samsung regarding the company.

The future of the Vision Fund has come under scrutiny following its dismal performance and a historic selldown of its Alibaba stake. But Goto insisted in an interview with the Financial Times that Son was likely to stay the course even as the fund goes on “a defensive mode” to cut costs.

“I won’t be surprised [if Son changed his mind] but I don’t think that’s likely. Investment firm is this company’s ultimate style,” he said. But he added: “The basis of Mr Son’s thinking is that change is the best growth strategy to avert risks.”

The straight-talking 59-year-old Goto is far from an ordinary finance head. His public duty is to persuade investors to scrap what he describes as the misleading image of the deal-driven, debt-saddled group as “fascinating but reckless”. 

People close to SoftBank said that a crucial part of Goto’s job was to convert Son’s ideas into comprehensible pitches to its lenders. When even his finance team cannot find a way to deliver on the founder’s vision, Goto is one of the few who can say no to Son.

“When an executive in charge of the company’s financing and cash flow says no, that’s the end of the story so I know the weight of my words when I say no,” Goto said in an interview at the company’s head office in Tokyo.

His rule of thumb, however, is to exhaust all the options by being creative. “I tell my team not to search for reasons why they can’t do it, but to think of ways that can be done if they were to try it. When it’s really impossible, there is no answer and that’s when I say we should not do this. Mr Son is rational so he gets it right away.”

The one line he does not cross is doing anything that will damage what he calls an “absolute relationship of trust” SoftBank has built with its biggest banking lender Mizuho.

“It takes a long time to build a relationship of trust but when it crumbles, it happens with the blink of an eye. I have never broken my promise with the banks in the past 20 years,” he said.

Japan’s third-largest bank is SoftBank’s biggest lender and the most heavily exposed to its fortunes, having financed Son’s biggest deals involving US wireless carrier Sprint and British chip designer Arm.

“The current relationship between Mizuho and SoftBank Group would have been unthinkable without Mr Goto. That’s how important he is,” said Koji Fujiwara, senior adviser at Mizuho Financial Group and former chief executive of Mizuho Bank.

The relationship has been tested in recent years after the implosion of high-profile bets made by the Vision Fund, including WeWork and the collapsed Greensill Capital, raised serious governance concerns.

When SoftBank bailed out WeWork in 2019 to avert a cash crunch, Mizuho issued a stern warning to both Son and Goto that there would be no additional bailouts.

As the performance of Oyo, a SoftBank-backed Indian hotel chain, lagged in 2020, Goto immediately arranged dinners between Mizuho executives and Ritesh Agarwal, Oyo’s founder, to address their concerns.

“We have expressed concerns many, many times but each time, Mr Goto gave us a prompt and precise response,” Fujiwara added.

As a former banker at Mizuho Trust & Banking, Goto has a clear understanding of what the company’s lenders want. He joined SoftBank in 2000, at the urging of his mentor Kazuhiko Kasai, another former banker who served as Son’s finance chief and right-hand man until he passed away in late 2013.

Eventually he would double as CFO and head of Son’s baseball team, while overseeing SoftBank’s evolution into Japan’s third-largest mobile phone carrier and world’s largest tech investor.

Kiyoshi Miyake, the former deputy president of Mizuho Bank who is now president of real estate developer Chuo-Nittochi Group, said Goto brings a sense of stability to a dynamic but chaotic group.

“The ideas flow like water for Mr Son, and it was Mr Goto who said which of those can be done and which cannot be done,” he said, having known Goto since 2008 both as a client and a drinking companion.

Investors still find it difficult to get a full picture of SoftBank’s sprawling liabilities in part due to Son’s debt-fuelled dealmaking, but also because of the complex financial instruments employed by Misra.

Goto has attempted, not entirely successfully, to simplify SoftBank’s layers and layers of debt, pledging to keep the company’s loan-to-value ratio below the 25 per cent threshold.

The metric showing its net debt compared with the value of its holdings stood at 14.5 per cent at the end of June, from 21.6 per cent at the end of last year. SoftBank has ¥3.1tn ($22bn) in net debt, but the overall group has interest-bearing debt of ¥17.9tn.

Many investors like Goto for his energetic style, but one longtime shareholder questioned how long the group could continue turning to radical asset sales such as the Alibaba selldown to bolster its balance sheet every time it faces a downturn.

“It’s impressive how Mr Goto handles each of Mr Son’s impossible tasks but I fear that the company is reaching a limit,” the Hong Kong-based investor said.

But whatever the company’s future, very few expect Goto to join the string of recent departures. “I think Mr Son places an absolute faith in Mr Goto that he will not walk away under any circumstance,” Fujiwara said.

Goto, meanwhile, says he will remain as long as he is needed by Son: “I always tell him to replace me without any hesitation if he thinks there is a better person for my role.”

Additional reporting by Antoni Slodkowski in Tokyo