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SoftBank’s CEO Won’t Speak at ‘Davos in the Desert’ Even Though Saudi Arabia Put $45 Billion Into His Vision Fund

Just days ago, SoftBank CEO Masayoshi Son was still planning to speak at Saudi Arabia’s “Davos in the Desert” investor conference this week. However, according to a Tuesday report, Son has now cancelled his speaking appearance, though he may still show up at the conference.

Son is far from the first big executive to back away from the Saudi Future Investment Initiative (FII) shindig, in the light of the international outcry over the Saudis’ killing of journalist Jamal Khashoggi. However, he is perhaps the most important dropout, due to SoftBank’s extremely close ties with the Saudis.

SoftBank has become an extraordinarily prolific investor on the global stage through its Vision Fund, and a large chunk of that war chest—$45 billion of the $100 billion total—comes from the Saudi sovereign wealth fund. The Saudis are using the vehicle to diversify their investments beyond fossil fuels, and have invested in 50-60 companies via the fund.

Earlier this month, Bloomberg reported that the Saudi Public Investment Fund was preparing to repeat the trick, again putting $45 billion into a second SoftBank Vision Fund. So it is no surprise that SoftBank (SFTBY) and the Saudis are seen as deeply linked, and that the Khashoggi affair has led to investor wariness about the Japanese conglomerate.

Jamal Khashoggi was killed inside the Saudi consulate in Istanbul earlier this month. After spending weeks denying the killing, the Saudis admitted it late last week, although they claimed he died while fighting Saudi officials. Most of the international community has reacted to this claim with disbelief, as the agents came equipped with a bonesaw, and one was a specialist in dismembering people.

The episode, of which Turkish officials claim to have a detailed audio recording, has upended Saudi Arabia’s drive to encourage foreign investment and cooperation. Crown Prince Mohammed bin Salman, the de facto ruler, has spent the last year conducting a media blitz to portray himself as a great reformer and modernizer; that image is now seriously in doubt.

Apart from SoftBank’s Son, the other major figure to pull out of the Future Investment Initiative at the last minute is Joe Kaeser, the CEO of Siemens. The German company employs 2,000 people in Saudi Arabia and works with major state-owned players such as oil giant Saudi Aramco and the manufacturing group SABIC.

“Siemens is a reliable and committed partner of the kingdom and its VISION 2030 [diversification plan]. But for now, truth needs to be found out and justice applied,” Kaeser said in a statement Monday.