Softbank's Son tangled up in Web mystery
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Masayoshi Son, president of Japan's Softbank Corp, has fought off a threat to his control of Beijing-based Oak Pacific Interactive (OPI), the parent company of Renren.com - the Chinese equivalent of Facebook - according to reports in the Chinese media.
Joseph Chen, chairman and chief executive officer of the group, had hoped to reduce Son's stake in OPI by asking the latter to transfer part of his stock holding to Renren. That's according to a report in the 21st Century Business Herald, a Chinese business newspaper, which cited unnamed sources.
It also quoted Chen as say-ing that Renren may seek an IPO on the Nasdaq Exchange in New York next year.
If Renren lists successfully, Chen could realize his goal of diluting Son's stake in OPI by cashing in the stock, thus resulting in a reduced holding by the Japanese entrepreneur, the paper said.
However Son, who is one of the biggest foreign investors in the Chinese Internet industry and has been dubbed "Asia's investment God" in some domestic reports, refused to accede to the plan, and was, in fact, actually considering increasing his investment in OPI, the paper said.
It also reported that Son's refusal may delay Renren's planned IPO next year.
In 2008, a battle for control between Softbank and the management of 9you.com, another Chinese Internet startup in which Son had invested, ruined plans for the website to launch an IPO in Tokyo, the paper said.
OPI has rejected the news-paper's claims, "It (the report) is totally groundless, and our president never did that interview (with the 21st Century Business Herald)," said Wang Yi, a spokesman for Oak Pacific Interactive.
An e-mail to Softbank's Tokyo office from China Daily was not immediately answered on Tuesday.
The difference between close partners and business rivals may not be that great, said Dong Xu, an analyst from the domestic research firm, Analysys International.
"Softbank does hold a relatively high stake in OPI, and Chen may want to find a 'balanced point' to ensure his company enjoys the maximum benefit," said Dong.
Founded in 2005, Renren, which currently has 150 mil-lion registered users, is the biggest Social Network Service (SNS), by the number of real names registered, in China.
In April 2008, OPI raised $430 million from an invest-ment group led by Softbank, in exchange for a 35 percent stake.
Wu Jia, a Boston-based analyst with the global research firm Strategy Analytics, said given the large number of Chinese companies going public in the United States this year, Renren might be just one of many filing with the US Securities and Exchange Commission next year.
With a large number of registered users, Renren is clearly a formidable player in the SNS field in China," she said.
But I'd be cautious that Tencent might be a serious challenge for them going forward, as they seem to target pretty similar users."
