BO ON s aia at Oop =e 5 a Waal 2 Ma i SS aie Sy A 575 LEXINGTON AVENUE * 7th FLOOR * NEW YORK, NY 10022 * PH. 212-446-2300 * FAX 212-446-2350 MATTHEW L. SCHWARTZ Tel.: (212) 303-3646 E-mail: mlschwartz@bsfllp.com January 20, 2016 TO: MEMBERS OF THE BOARD OF DIRECTORS OF SOFTBANK GROUP CORP. AND SPRINT CORPORATION Demand for Internal Investigation of Senior Executive and Director Nikesh Arora Dear Board Members: 1 am writing on behalf of shareholders in Sprint Corporation (“Sprint”) and ADR holders in SoftBank Group Corp. (“SoftBank”) to express concem that the directors of SoftBank and Sprint have failed to exercise due care in their appointment of Nikesh Arora to major executive and board-level positions, and to request that the boards commission an independent investigation of Mr. Arora and his management team. Mr. Arora’s current associations create pervasive conflicts of interest with SoftBank and Sprint. His past conduct also demonstrates his willingness to put his personal interests—and those of his partners—above those of the companies that have employed him as a senior executive. In addition to these conflicts, Mr. Arora’s tenure as the Chief Executive Officer of SB Group US Ine. (previously SoftBank Internet and Media) (“SBUS” or “SIMI") has been marked by poor investment performance and a series of questionable transactions. Despite these issues, the SoftBank board saw fit to make Mr. Arora the third-highest paid executive in the world without any track record of accomplishment at the company. SoftBank attempted to alleviate some of the concerns regarding Mr. Arora’s performance by announcing he was going to personally purchase nearly $483 million in SoftBank stock as a sign of confidence in the company’s future. Noticeably absent from that announcement was any disclosure concerning how such a purchase was going to be financed and what concessions SoftBank had made in order to arrange such financing. More specifically, it failed to mention whether SoftBank had guaranteed Mr. Arora’s compensation at an exorbitant level for a period of years and whether SoftBank had made other commitments that favored Mr. Arora but were detrimental to the interests of shareholders generally. At the same time, the Sprint board elevated Mr. Arora to the position of director of the company apparently without even minimal due diligence. As outlined below, there are a series of troubling issues that the boards of SoftBank and Sprint should address immediately. The purpose of this letter is to demand that the boards ofDirectors of SoftBank Group and Sprint Corp. January 20, 2016 Page 2 both SoftBank and Sprint authorize an internal investigation by an independent firm not associated with Softbank, Sprint, or any of their executives or board members. Based on the preliminary information outlined in this letter, we believe that such an investigation should be initiated and announced publicly no later than 60 days after the date of this letter. Based on the information available to the shareholders we represent, we believe that an independent investigation will establish compelling grounds for the boards of SoftBank and Sprint to dismiss Mr. Arora from his executive and board positions with SoftBank and Sprint. As the boards consider the scope of such an investigation, our clients would welcome an opportunity to present their views and provide additional information. Conflicts of Interest Serving as a director or executive of a corporation obligates an individual to further the interests of that corporation and to exercise a fiduciary duty of care. To the extent that a board of directors fails to exercise due care in assuring that senior executives and directors do not have interests that conflict with the interests of the corporation and its shareholders, directors may be liable for the failure to exercise such care, Directors have an obligation to engage with sharcholders and take constructive action with respect to material issues that shareholders bring to their attention. Mr. Arora’s actions in past and current fiduciary positions raise serious questions about whether he seeks to advance his own interests over the interests of the corporations he has served as an executive or director. Mr. Arora’s relationship with private equity—where he presently serves in a senior role at Silver Lake Partners, advising on potential technology company investments—competes with his position at SoftBank, where he has an obligation to advance SoftBank’s interest in making similar types of investments, Mr. Arora also invests privately in a fund that directly benefits Mr. Arora and a principal at Silver Lake, allowing them to take advantage of opportunities that might be best pursued by SoftBank itself. In addition, the boards of SoftBank and Sprint have apparently disregarded Mr. Arora’s past questionable conduct involving, among other things, the demise of TIM Hellas, a Greek telecommunications company. Current Conflicts of Interest Mr. Arora’s role as Chief Executive Officer (“CEO”) of SIMI, as described in a SoftBank press release, makes him “directly responsible for overseeing our Internet, telecommunications, ‘media and global investment activities.”' Thus, he oversees the process of identifying and pursuing potential investment opportunities in the technology sector. Since 2007, though, Mr. ‘Arora has performed a similar function as a senior advisor to Silver Lake Partners, a private ‘equity firm specializing in technology. This dual role has the potential to reward Silver Lake to ' “Nikesh Arora to Join SoftBank as Vice Chairman, SoftBank Corp. and CEO of the Newly Formed SoftBank Internet and Media, _ Inc.” SoftBank — Corp. http://www. softbank jp/er/corp/news/press/sb/2014/20140718_01 (published July 18, 2014) 2Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 3 the detriment of SoftBank. For example, it may rob SoftBank of potential investments in favor of Silver Lake. ‘This concern regarding Mr. Arora’s role at Silver Lake is not merely hypothetical. On occasion—including at least one during his tenure at SoftBank—Silver Lake has benefitted enormously in deals involving Mr. Arora’s employers. These transactions include: * Silver Lake acquiring a controlling interest in Skype with other investors for $1.9 billion and then selling it to Microsoft after only 18 months for $8.5 billion. Many have questioned Microsoft’s valuation of Skype, but there is little doubt that the valuation was driven significantly higher after Google—where Mr. Arora was Chief Business Officer at the time—expressed an interest in Skype.’ A plausible inference from this is that Mr. Arora used his position at Google to drive a higher valuation for his friends at Silver Lake. + Divesting Silver Lake’s equity position in Alibaba just prior to a 20% decline in its_stock price. It is well-known that SoftBank is the largest shareholder of Alibaba and that the two companies have common board members. Silver Lake is also a significant shareholder of Alibaba. In late January 2015, two events led to a 20% decline in the Alibaba stock price: (1) a report from the Chinese government criticizing Alibaba for failing to address counterfeiting; and (2) a disappointing financial statement from the previous quarter. Around this time, however, Silver Lake divested over 45% of its holding in Alibaba.’ The timing of these events raises serious questions about the possibility of insider trading and Mr. Arora’s possible involvement. Mr. Arora’s relationship with Silver Lake and its principals extends beyond his role as a senior advisor. He has a close and extensive relationship with Egon Durban, the managing partner of Silver Lake, as demonstrated by their common directorships at Dane LLC, Dane LLC is an investment company that claims to be the nominee for its directors, including both Arora and Durban. It started in 2008 as D&A Europe in the United Kingdom before becoming Dane LLC in 2012. Little public information is available regarding Dane because its activities are kept private. It appears, however, that Dane has engaged in several private deals to yield rich rewards for the benefit of Mr. Arora and Mr, Durban, 2 _Blizabeth Woyke, “Investor Silver Lake Defends Skype's $8.5 Billion Acquisition Price,” Forbes, _ http://www forbes.comy/sites/elizabethwoyke/201 1/05/10/silver-lake-defends- skype-acquisition-price (published May 10, 2011), > Belinda Cao, “Silver Lake Distributes Alibaba Shares to Investors,” Bloomberg Business, http://www. bloomberg. com/news/articles/2015-05-15/silver-lake-rakes-in-2-billion-by-selling- half-of-alibaba-stake (last updated May 15, 2015). 3Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 4 The Looting of TIM Hellas After his appointment to the board of TIM Hellas, a major Greek telecommunications company, Mr. Arora allegedly played a role in looting and sacking the company for the benefit of various private equity firms and himself. With Mr. Arora’s assistance, private equity firms apparently loaded TIM Hellas with burdensome debt and looted its assets before jumping ship, leaving the company in shambles. ‘Those firms acquired TIM Hellas in 2005 and placed Mr. Arora on its board in January 2006. After failed attempts to sell TIM Hellas over the course of the following year, Arora and his co-directors steered it on a path to reward themselves and their private equity shareholders at the compatiy’s and its creditors’ expense. In December 2006, TIM Hellas issued approximately €1.4 billion in bonds. The company’s management told bond markets this capital would be used to reduce existing debt, but this proved to be nothing more than a ruse, Instead, the money was used to redeem complex securities called convertible preferred equity certificates (“CPECs”) held by the private equity firms and Hellas directors such as Mr. Arora. Despite their par value of €1, TIM Hellas redeemed these CPECs at a value 35 times greater than that—giving the private equity firms and directors a €974 million windfall. Mr. Arora—who left the board soon thereafter in 2007—redeemed over 31,000 CPECs for a return greater than €1.1 million.* Also in 2007, after looting TIM Hellas’ assets, the private equity firms sold TIM Hellas to Weather Investments, Crippled with over €3 billion of debt, though, TIM Hellas had no chance of surviving. Thus, it declared bankruptcy in 2009—leaving its creditors empty-handed. This raiding of a once-thriving telecommunications company, perpetuated in part by Mr. Arora, has gamered significant media attention and generated multiple lawsuits. Recognizing that private equity often over-leverages its targets and leaves them facing collapse, the Daily Telegraph observed that “rarely have they been quite as big and left as bad a taste in the mouth as Hellas.’ Even The Economist described what happened to Hellas as an “egregious-looking deal.”* Hellas’ liquidators have sought to correct this wrongdoing by filing a lawsuit in the * See Complaint, In re: Hellas Telecommunications (Luxembourg) Il SCA, Case No. 14- 01848-mg (Dkt. No. 1) (Bankr. $.D.N.Y.) (filed March 13, 2014), 5 Helia Ebrahimi, “How Private Equity Plundered Profitable Greek Telecoms Company Hellas,” The Telegraph, http:/Avww telegraph.co.uk/finance/newsbysector/- mediatechnologyandtelecoms/telecoms/8999662/How-private-equity-plundered-profitable- Greek-telecoms-company-Hellas.html (published Jan. 7, 2012). . “Another Greek Tragedy,” The Economist. _http://www.economist.com/news/finance- and-economics/21654680-pressure-mounts-two-private-equity-giants-did-very-well-out- disastrous (published June 20, 2015; updated since at least July 25, 2015). 4Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 5 United States against several defendants—including Mr. Arora."In March 2015, only months prior to standing election as a director of SoftBank, Mr. Arora entered into a confidential settlement with the liquidators." Regulators in Greece and Luxembourg are also considering taking action against the Hellas directors, such as Mr. Arora, and others. Mr. Arora’s involvement at TIM Hellas casts doubt on his ethics and management ability. Perhaps it is unsurprising then that Mr. Arora has attempted to minimize his involvement with Hellas. For example, Mr. Arora’s biography on the Sprint website originally boasted of his experience at Hellas, but after the media began to cover the Hellas transactions in 2015, the references to Hellas were removed from the biography. This media coverage and any other consequences arising from the Hellas transactions will undoubtedly be distractions from Mr. Arora’s duties at SoftBank and Sprint. More concerning, though, is the apparent failure of the SoftBank and Sprint boards to investigate this matter thoroughly. We believe the courts would view that failure as a complete dereliction of each board’s responsibilities. Poor Investment Performance at SIMI While Mr. Arora’s conflicts of interest and history of questionable conduct are concem enough, his investment performance at SIMI can best be described as lackluster, Pursuing investments in the technology sector, which is SIMI’s purpose, is undoubtedly a risky endeavor. Conducting proper due diligence beforehand, however, can mitigate that risk to some extent. But Mr. Arora’s investment strategy appears to place little—if any—emphasis on conducting due diligence in favor of placing “big bets” resting on little more than hope. SIMI’s investments in DramaFever and Housing.com exemplify this strategy and its pitfalls. Both cases demonstrate significant losses of shareholder value as a result of foregoing proper due diligence. DramaFever In October 2014, SoftBank acquired DramaFever, an online video platform specializing in Korean movies and television shows, for $100 million. Since then, DramaFever has seen its user traffic drop precipitously. An Internet traffic monitoring service, comScore, reported that DramaFever’s traffic fell by nearly 50% by May 2015.’ Shortly thereafter, SIMI put DramaFever 7 See Complaint, In re: Hellas Telecommunications (Luxembourg) Il SCA, Case No. 14- 01848-mg (Dkt. No. 1) (Bankr. $.D.N.Y.) (filed March 13, 2014). ‘ See Stipulation and Order Dismissing Defendant Nikesh Arora With Prejudice, In re: Hellas Telecommunications (Luxembourg) II SCA, Case No. 14-01848-mg (Dkt. No. 149) (Bankr. $.D.N.Y,) (filed March 18, 2015). ° Keach Hagey, “Wamer Bros. bids for Control of Korean Soap Opera Site DramaFever,” Wall Street Journal. http://blogs.ws).com/emo/2015/07/17/wamer-bros-bids-for-control-of- korean-soap-opera-site-dramafever (published July 17, 2015). 5Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 6 up for sale—less than a year after its acquisition.'° To date, Mr. Arora has been unable to find a buyer. Ifa buyer is ever found, though, DramaFever’s failure to retain users will undoubtedly cause SoftBank to have a significant loss from this poor investment. Housing.com Another poor investment choice was SIMI acquiring a stake in Housing.com, a real estate search portal based in India, SIMI reportedly invested $70-90 million in Housing.com in November 2014 for 32% of its equity."" The investment turned sour, though, as a result of poor ‘management and serious personality conflicts with Housing's CEO. As one media source has described it, Housing’ failure resulted in part because of “an imprudent investment without adequate diligence.” The same article goes on to say that “this has put the largest owner of Housing—Japanese internet giant SoftBank, one of the biggest internet investors from Asia with $70B in revenue—in a delicate spot.”"” After Housing's CEO was dismissed by the board, SIMI sought to extricate itself by selling its interest in the company. While SIMI is reportedly seeking $350 million from a buyer, the best offer to date has been $175 million with little interest from other buyers. Mr. Arora’s investment strategy as the CEO of SIMI appears to be nothing more than throwing a dart ata dartboard or, as VCCircle deseribes it, a “blow-up of irrational exuberance.”"* How many more millions of dollars of shareholder value must be wasted before the board realizes something must be done? Other Questionable Activity at SIMI In addition to Mr. Arora’s poor investment choices, some of his other decisions at SIMI merit the board’s attention. For example, even though SoftBank was heavily invested in Indian e-commerce site SnapDeal and its CEO publicly declared no further funding was needed, © pia, 1 Aditi Shrivastava, “No More Resignations! Housing.com Says Enough is Enough, Fires CEO Rahul Yadav,” Economic Times, http://articles.economictimes.indiatimes.com-/2015-07- O1/mews/64004207_1_nexus-venture-partners-housing-board-housing-com (published July 1, 2013); Manu P. Toms and Shrija Agrawal, “Housing Crisis Puts SoftBank in a Spot Admidst its Headline Grabbing Announcements,” VCCircle. http://www. vecirele.com/news/technology/2015/07/03/housing-crisis-puts-softbank-spot-amidst- its-headline-grabbing (published July 3, 2015). Toms and Agrawal, supra, note 1. 7 Ibid. 7 Ibid. 6Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 7 SoftBank helped lead the charge in another round of funding that doubled SnapDeal’s valuation. Another example is the excessively large fees made to Alok Sama, who consulted with SIMI in several transactions over the last year and now works for Mr. Arora at SIML ‘Snapdeat SoftBank has made significant investments in Snapdeal, one of India’s largest e- commerce sites. In May 2014, Snapdeal raised $100 million in an investment round that valued ‘the company at approximately $1 billion.'* Only five months later, Mr. Arora opened SoftBank’s wallet to invest an additional $627 million in Snapdeal—resulting in a valuation of $2-3 billion.’ While this rushed transaction reflects the same lack of due diligence demonstrated in the DramaFever and Housing.com deals, the Snapdeal investment raises other concems due to Mr. Arora’s personal interests. As reported by the Wall Street Journal, Mr. Arora retained a personal stake in Snapdeal at the same time as SoftBank’s investment.'” Mr. Arora’s actions over the last year raise doubts about whether his interests are aligned with those of SoftBank. In April 2015, for example, Mr. Arora resigned from the Snapdeal board of directors without explanation.'* A few months later, Mr. Arora led yet another investment round in SnapDeal that raised $500 million—primarily from Alibaba, Foxconn, and SoftBank.'® This round, which again doubled Snapdeal’s valuation in less than a year’s time, is all the more surprising in light of comments made by Snapdeal’s CEO in March 2015. At that time, Kunal Bahl, one of Snapdeal’s founders, stated that Snapdeal was exceptionally well- funded at least for a few years, had only just begun to touch the money raised by SoftBank ‘months prior, and they would not be taking any more investor meetings in the foreseeable u Dhanya Ann Thoppil and Kenan Machado, “India’s Snapdeal.com Said to Be in Talks With Japan’s SoftBank, Others,” Wall Street Journal. http:/Avww.ws).com/articles/indias- snapdeal-com-said-to-be-in-talks-with-japans-softbank-others-1413377403?alg=y (last modified Oct. 15, 2014). Ingrid Landen, “India’s Snapdeal Snaps Up $627M Led By SoftBank to Supercharge ts Marketplace,” TechCrunch, http’/techerunch.com/2014/10/27/snapdeal-india-softbank (published Oct. 27, 2014), 7 ‘Thoppil and Machado, supra, note 15. ‘* Manu P, Toms, “SoftBank’s Nikesh Arora Resigns From Boards of Snapdeal, Housing and Ola.” ‘VCCirele, http://www. vecircle.com/news/technology/2015/04/29/-softbanks-nikesh-aora-steps-down-boards- snapdeal-housing-and-ola (published Apr. 29, 2015). Mr. Arora also resigned from the boards of Housing and Ola, companies in which SoftBank had invested $800-900 milion. Sean McClain, “Snapdeal Raises $500 Million From Investors Including Alibaba, Foxconn, SoftBank,” MarketWatch, _http://www.marketwatch.com/story/snapdeal-raises-500- million-from-investors-including-alibaba-foxconn-softbank-2015-08-18- 91033430?link=MW_latest_news (published Aug. 18, 2015). 7Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 8 future.” If Snapdeal did not need this additional money from SoftBank and others, why did Mr. Arora feel the need to provide it? Of course, a higher valuation would benefit Mr. Arora's personal interest in Snapdeal. Furthermore, how was Mr. Arora’s personal interest in Snapdeal financed? Did SoftBank—and by extension, its shareholders—have any role in financing or guaranteeing the financing for this interest? Compensation to Alok Sama Reports indicate that Mr. Arora relied on the assistance of Alok Sama, a co-founder of Baer Capital, as a consultant for some of SIMI’s investments in India such as the one for Snapdeal. Mr. Sama’s fees were allegedly paid through a company named Kensington Capital International Ltd., which we believe to be based in the British Virgin Islands (“BVI”). The use of an entity based in the BVI to arrange deals in India is concerning. This is especially so when the payments made to Alok Sama for his “consulting” are reported to be extraordinarily large— potentially up to $6 million for only six months of work. And after these payments were made, Mr. Sama was hired by SoftBank.”” Notably, this announcement was made around the same time that Mr. Arora arranged for the additional—and wholly unnecessary—$500 million investment for Snapdeal discussed above. Mr. Arora’s Excessive Compensation and SoftBank’s Deceptive Disclosures Shareholder concems regarding Mr. Arora extend to other decisions by the SoftBank board as well. First, the board authorized Mr. Arora to be paid an exorbitant amount of money without any track record of accomplishment at SoftBank. To make matters worse, the board waited until after shareholders elected Mr. Arora to the SoftBank board before disclosing his compensation— information that undoubtedly would have been helpful to sharcholders when voting at the June 2015 shareholders’ meeting. Lastly, SoftBank and Mr. Arora announced that he would personally buy $483 million in SoftBank stock as a sign of confidence in the company. Given that Mr. Arora was unable to afford such a purchase on his own, though, there is concern that SoftBank is at risk from the purchase without adequate disclosure to its shareholders. Excessive Compensation ‘We see no evidence that the board has taken its responsibilities seriously when deciding how to compensate Mr. Arora, Over the short period from September 2014 to March 2015, Mr. ao Sindhu Bhattacharya, “Stopped Investor Meetings, Yet to Even Use SoftBank Funds: Snapdeal,” Firstpost, http://www. firstpost.com/business/stopped-investor-meetings-yet-even-use- softbank-funds-snapdeal-2181387.html (published Mar. 31, 2015). a Manu P. Toms, “Baer Capital Co-Founder Alok Sama Joins SoftBank,” VCCircle, http://www. vecirele.com/news/finance/2015/08/21 /baer-capital-co-founder-alok-sama-joins- softbank (published Aug. 21, 2015). 8Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 9 Arora’s compensation totaled ¥16.556 million (nearly $138 million)”*—making him the third- highest-paid executive in the world.” This amount was worth nearly a third of all of SoftBank’s dividends to shareholders in fiscal year 2014.* Yet nothing in Mr. Arora’s history at SoftBank could possibly come close to justifying such a vast transfer of shareholder value. SoftBank’s shareholders certainly have not seen the benefit. Mr. Arora joined SoftBank in September 2014, where the stock peaked at ¥8,740, Today, the stock is trading near ¥4,700—a more than 45% decline. ‘This disparity between shareholder results and Mr. Arora’s personal reward is both alarming and intolerable. Given the stock’s poor performance and the concerns addressed in this letter, the only reasonable explanation is that the board has done little more than throw money away at an unproven executive with no actual accomplishments to point to during his tenure at the company. In addition to the excessive nature of Mr. Arora’s compensation, the timing of SoftBank’s disclosures reflect an apparent attempt to conceal his compensation until after he was elected a member of SoftBank’s board of directors. Shareholders were asked to elect Mr. Arora to the board at the annual shareholders’ meeting on the morning of June 19, 2015, without the benefit of any disclosure regarding his compensation package. That afternoon, however, SoftBank disclosed financial statements with data regarding Mr. Arora’s pay; SoftBank’s investors did not have the benefit of this information until it was reported in the press the following day. Furthermore, SoftBank did not publicly inform shareholders until it published its Annual Report in July 2015. Disclosures Regarding Mr. Arora’s Share Purchase The adequacy of SoftBank’s announcements regarding Mr. Arora’s purchase of SoftBank stock is also suspect. On August 19, 2015, SoftBank issued a press release stating that Mr. Arora would be purchasing approximately $483 million worth of SoftBank’s stock on the Tokyo Stock Exchange in his personal capacity.”* ‘The purchase, touted as a significant personal risk for Mr. ‘Arora, was intended to demonstrate his confidence in SoftBank and tie him to the company’s success. : SoftBank Annual Report 2015 » ‘Takashi Amano and Dave McCombs, “SoftBank Sets Pay Record With $135 Million Pay for Arora,” Bloomberg Business. http:/www-bloomberg.com/news/articles/2015-06-22/sofibank-sets-pay-record-with-135- rllion-pay-for-arora (last updated June 22, 2013) % —“Son’s Heir Apparent Got $135m,” Nikkei Asian Review, http://asia.nikkei.com/~ Business/Companies/Son-s-heir-apparent-got-135m (published June 20, 2015). *s SoftBank Group Corporation, “Purchase of Shares by SBG’s Representative Director and President & COO,” http://www softbank.jp/en/corp/news/press/sb/2015/20150819_01 (published Aug. 19, 2015). 9Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 10 Absent from this announcement, and any other disclosure by SoftBank, is how Mr. Arora’s purchase was financed and to what extent SoftBank shareholders may be on the hook for this “personal” purchase. Mr. Arora did not have the funds to cover the purchase and relied on loans for financing,”* One would expect that such a large personal stake, backed by loans subject to a capital call, would come with a degree of trepidation. It was surprising then to see that Mr. Arora told the media that “[i}f he loses the money he has in SoftBank, he'll manage.” Such a display of confidence demonstrates that perhaps Mr. Arora’s risk exposure is not what has been touted to shareholders and, instead, SoftBank has decided to guarantee the loans used to finance the share purchase. Such a guarantee only further demonstrates the willingness of the board to throw money at Mr. Arora with no record of success at the company. More concerning, though, is the risk shareholders face if a capital call is ever instituted on the loans. This chain of events reflects a potential effort by the SoftBank board to conceal from shareholders the true nature of Mr. Arora’s stock purchase. Instead of putting Mr. Arora personally at risk—as it was advertised to shareholders originally—this transaction appears to do nothing more than reward Mr. Arora if SoftBank does well and leave the sharcholders bearing all of the risk if things go sour. Nevertheless, SoftBank has yet to disclose the extent to which SoftBank and its shareholders are at risk from “one of the largest executive stock purchases ever.” As a result of Mr. Arora’s conflicts of interest, there are serious questions concerning his capacity and willingness to advance the interests of SoftBank and Sprint over his own financial interests. Mr. Arora’s conflicts of interest are compounded by his questionable business decisions as the CEO of SIMI. Shareholders appear to have been the last thing on the SoftBank board’s mind when it authorized hiring Mr. Arora and granting him such exorbitant compensation. Similarly, the board of Sprint appears to have failed to conduct even the most minimal diligence concerning Mr. Arora before making him a director of the company. In these circumstances, we believe it is imperative that the boards of SoftBank and Sprint immediately authorize an independent investigation of Mr. Arora’s conduct, and those of certain members of his management team, such as Mr. Sama. If the boards of SoftBank and Sprint do not arrange and announce such an independent investigation within 60 days, we intend to pursue all available remedies, including legal action in Japan and in Delaware and presenting information to government regulators. We would prefer not to have to resort to such measures and trust that, in ‘commencing an investigation, you will afford our clients an opportunity to share their concems % Pavel Alpayev, Takashi Amano, and Peter Elstrom, “All In: Why Nikesh Arora Bet $483 Million on SofiBank’s Future,” Bloomberg Business, http://www. bloomberg.com/-news/features/2015-11-25/all- nikesh-arora-bet-483-million-on-softbank-s-future (published Nov. 25, 2015). 7 Ibid. bid. 10Directors of SoftBank Group and Sprint Corp. January 20, 2016 Page 11 with you or your counsel directly. Such an opportunity will allow us to present you with additional information supporting these concerns, Singerely, Matthew L. Schwartz Jack G. Stem i