Vista’s Smith Tells Executives Co-Founder Sheth May Leave Firm

(Bloomberg) -- Robert Smith, the billionaire co-founder of Vista Equity Partners, said President Brian Sheth may leave the private equity firm, according to people familiar with the matter.

Smith said on a call with some Vista executives on Wednesday that he and Sheth will discuss the departure, said the people, who asked not to be named because the matter is private. He didn’t give a time frame for the exit. Sheth had told executives in December that he wanted to leave or retire, Smith said on the call.

Sheth, who co-founded Vista with Smith, wasn’t invited to Wednesday’s call, according to one of the people. There are no active, formal discussions regarding his departure, the person said.

A spokesman for Sheth declined to comment as did a spokesman for Smith and Vista.

Separately, Vista on Wednesday removed Sheth as a director of a company it owns, Datto Holding Corp., according to an amended initial public offering filing.

Smith on Wednesday’s call discussed plans to pay $139 million and acknowledge wrongdoing to end a four-year U.S. tax investigation, said the people.

The settlement includes a non-prosecution agreement that says he failed to pay about $30 million in taxes, with penalties and interest making up the remainder of the expected payout, Bloomberg reported Wednesday. Smith said on the call that over three years, he failed to file accurate reports of foreign bank and financial accounts, known as FBARs.

His tax troubles arose from a $1 billion investment in Vista’s first fund two decades ago by an offshore foundation tied to Robert Brockman, a Houston software businessman, people familiar with the matter have said. The Justice Department and Internal Revenue Service have been investigating whether Smith failed to pay U.S. taxes on about $200 million in assets that moved through offshore structures tied to Brockman, those people said.

Brockman was on Thursday charged with 39 counts, including tax evasion, money laundering and evidence tampering, in what prosecutors called the largest U.S. tax case ever against an individual.

Read more: Tech Mogul Brockman Is Charged With Tax Evasion, Laundering

Smith, with a net worth of $7 billion, is the wealthiest Black person in America. He gained widespread acclaim last year when he vowed to pay off the student loans of the graduating class of Morehouse College.

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