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

Minutes after interviewing for SoftBank’s CFO job in the summer of 2000, founder Masayoshi Son made a characteristically quick decision: “I like the look in his eyes. Let’s hire him.

He had chosen to hire Yoshimitsu Goto, his fiercely loyal financial guru, who is now at the center of SoftBank’s grueling battle against a global tech debacle that has led the conglomerate to a $23 billion loss.

In the past 18 months, Son has lost three of his top lieutenants and potential SoftBank successors, including chief operating officer Marcelo Claure and chief strategy officer Katsunori Sago. Rajiv Misra, head of SoftBank’s $100 billion Vision fund and architect of the group’s sophisticated financial engineering, also stepped down to start his own fund.

Although not a candidate to take over Son’s investment empire, Goto is an exception to this revolving door of managers. He became indispensable as the link between the highly leveraged group and the world’s biggest banks. SoftBank’s planned US listing of British chip maker Arm is just one of its challenges, with Son announcing this week that it is exploring tie-up talks with Samsung over the company.

Vision Fund’s future has come under scrutiny following its poor performance and the historic sell-off 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 into “defensive mode” to cut spending.

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

The outspoken 59-year-old Goto is far from an ordinary financial executive. His public duty is to persuade investors to shed what he describes as a misleading image of the deal-driven and debt-laden group as “charming but reckless”.

People close to SoftBank said a crucial part of Goto’s job was turning Son’s ideas into understandable propositions for his lenders. When even his finance team can’t find a way to fulfill 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 Tokyo headquarters .

However, his main rule is to exhaust all possibilities by being creative. “I tell my team not to look for reasons why they can’t do it, but to think of ways they can do it if they try. When it’s really impossible, there’s no answer, and then I say we shouldn’t do that. Mr. Sin is rational, so he gets it right away.

The only line he doesn’t cross is doing anything that would harm what he calls the “absolute relationship of trust” SoftBank has built with the bank’s biggest lender, Mizuho.

“Building a relationship of trust takes a long time, but when it breaks down, it happens in the blink of an eye. I have never broken my promise to the banks in the last 20 years,” he said.

Japan’s third-largest bank is SoftBank’s biggest creditor and is most exposed to its fortunes after financing Son’s biggest deals, including US wireless carrier Sprint and British chip designer Arm.

“The current relationship between Mizuho and SoftBank Group would be unthinkable without Mr. Goto. That’s how important it is,” said Koji Fujiwara, senior adviser at Mizuho Financial Group and former CEO 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 avoid a financial crisis, Mizuho issued a stern warning to Son and Goto that there would be no further 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, the founder of Oyo, to address their concerns.

“We have raised concerns many, many times, but each time Mr. Goto has given us a quick and accurate response,” Fujiwara added.

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

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

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

“Ideas flow like water for Mr. Son, and it was Mr. Goto who said which ones could be done and which ones couldn’t be done,” he said, having known Goto since 2008 as both a client and like a drinking buddy.

Investors still find it difficult to get a full picture of SoftBank’s extensive liabilities, in part because of Son’s debt-fueled deals, but also because of the complex financial instruments used by Misra.

Goto tried, not entirely successfully, to pare down the layers and layers of SoftBank’s debt, promising to keep the company’s loan-to-value ratio below the 25 percent threshold.

Its net debt-to-equity ratio stood at 14.5% at the end of June, up from 21.6% at the end of last year. SoftBank has 3.1 trillion yen ($22 billion) in net debt, but the entire group has interest-bearing debt of 17.9 trillion yen.

Many investors like Goto for his energetic style, but one longtime shareholder questioned how long SoftBank could continue to turn to radical asset sales, such as the Alibaba selloff, to shore up its balance sheet in the face of a downturn.

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

But whatever the future holds for the company, very few expect Goto to join the string of recent departures. “I think Mr. Son has absolute faith in Mr. Goto that he will not leave under any circumstances,” Fujiwara said.

Goto, meanwhile, says he will stay as long as Son is needed: “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