TOKYO — SoftBank Group, the acquisitive Japanese conglomerate, and the megabanks that work on its multiple deals, are facing concern about their close relationship and potential conflicts of interest.
Those concerns come a year after the conglomerate divested its Japanese mobile carrier. The public offering last December marked the end of SoftBank’s days as a staid, domestically focused telecom operator.
The rise of SoftBank as an aggressive, globally minded tech investor has presented opportunities as well as challenges for Japanese banks and regulators.
SoftBank — which is headed by CEO Masayoshi Son, who also steers the $100 billion Vision Fund — has undertaken over $189 billion worth of deals in equity, debt capital markets and mergers since 2016. That in turn has generated a vast $1.9 billion fee pool for global investment banks, data from Dealogic and Refinitive shows.
Given that Japanese banks are struggling to make a profit in a country where interest rates are almost zero, that has made SoftBank an especially lucrative source of fee income for them — especially when it comes to arranging and selling bonds to retail investors.
Retail investors are meanwhile drawn to Softbank bonds, as their yields of around 1.4% over a seven-year period are 30 times those of Japanese government debt and three to four times more than most other yen-denominated corporate bonds.
There are, however, concerns about how well retail investors understand the risks of investing in bonds that…