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May 25, 2007 11:09 pm
Softbank has withdrawn a threat of legal action against CLSA Asia-Pacific Markets following a partial apology from the brokerage over a critical report written about the Japanese communications conglomerate.
CLSA apologises for two specific points in its report in a five-paragraph “memorandum” dated May 23 and sent to customers.
CLSA apologised for its use of the title “Confidence Man” on an initial version of the report and acknowledged that this could have potentially been misunderstood by readers. The term can refer to “key man risk” – the possibility of damage to a company’s business prospects if a particular person ceases to be involved.
The CLSA report alluded to this risk in discussing Masayoshi Son, Softbank’s chief executive. But the term can also mean someone who deceives people to take their money.
CLSA also apologises for having “failed to mention the fact” that Softbank’s auditors had endorsed the group’s accounts for the six months ended September 2006.
The May 23 memorandum said: “Had this been mentioned in the report, it may have allayed concerns that readers may have had about Softbank’s accounting practices.”
Following the note’s circulation to clients, Softbank issued a press statement saying that legal action against CLSA or Kieran Calder, the brokerage’s telecommunications analyst and the report’s author, “will not be considered any further”.
The communications conglomerate said in a statement that, “in portraying Softbank’s accounting methods as inadequate, the report was misleading, its content was malignant in nature and it was written with ill-intent towards Softbank”.
However, Softbank said in the same statement that it “considers its claims were met” through the note’s publication.
CLSA declined to comment on Softbank’s statement.
Softbank said Friday it was “still considering taking legal action against the Financial Times”, which published articles in March that referred to the report.
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