KB News Desk
Naver CEO Choi Soo-yeon confirmed Tuesday the company will not sell its stake in Japan’s LY Corp., the operator of popular mobile messenger Line, in the “short term” amid LY’s push to lessen its dependence on Naver.
“We don’t plan to sell the stake in the short term,” Choi said, while noting the company cannot give confirmation on its mid-to-long term strategy.
Naver, Korea’s biggest internet portal operator, holds a 50 percent stake in A Holdings, the parent company of LY, while Japan’s SoftBank Group holds the other half.
Choi appeared before a parliamentary science and communications committee meeting a day after LY submitted a report to the Japanese government on measures to improve its security system in light of an information leak incident last year.
In the report, LY said it will accelerate its plan to separate its systems and private networks from Naver and its cloud computing affiliate, Naver Cloud, by March 2026 and terminate outsourcing to the Korean companies by the end of next year.
But LY said Naver and SoftBank both informed there are “difficulties associated with short-term capital movements at this time” but they intend to keep discussing potential restructuring of their capital relationship.
The three companies have been in talks over possibly reshaping their capital structure since Japan’s Ministry of Internal Affairs and Communications issued administrative guidance to LY earlier this year regarding the data leak incident, urging it to decrease its dependence on Naver.
In November last year, LY said over 300,000 records of its users’ personal information were leaked after Naver Cloud came under a cyberattack, as the two companies share a common authentication system.
Since then, LY has been taking various measures to lessen Naver’s influence in the company, including the departure of Shin Jung-ho, a key Korean executive, from its board.
Shin is known as the “father” of Line in Korea as he developed the service at Naver in 2011.
Japan’s actions drew criticism in Korea, with many viewing them as an attempt to diminish foreign influence on the widely used online platform in the country.
Line had around 96 million monthly active users in Japan, or 78 percent of the country’s population, as of last year. (Yonhap)
