The Korean government was not asked to take action against the Naver Line incident

이미지 확대

(Photo by Yonhap)

The South Korean government promised to close Naver Corp. if it decides not to sell its shares in Nine Yahoo Corp., which operates the popular messaging app Line.

Critics pointed out that if Naver announced the sale of its stake in Line Yahoo, the Korean government could be blamed for taking a passive approach to protect the domestic tech company from claims from Japan.

“If Naver proposes information protection measures instead of promoting stock sales, the government will provide all possible support,” a senior official from the Korean presidential office told Maeil Business Newspaper on Sunday.

The official added that Naver may need to be asked to provide more information if it needs government support.

The comments suggest that the focus is on strengthening information protection rather than share sales.

Line Yahoo is majority owned by A Holdings, a joint venture between Naver and SoftBank, and operates Line, a messaging app particularly popular in Japan. Naver and SoftBank share a 50 percent stake in A Holdings.

A smaller stake sale suggests SoftBank would become A Holdings’ largest shareholder.

Critics question why Naver is not asking the government for help despite calls from the presidential office for clarity on future plans.

Some industry observers speculate that Naver’s sale of shares in Line Yahoo could be part of the tech company’s moves to streamline its business.

(Artwork by Song Ji-yoon and Han Yubin)

The Ministry of Science and ICT said in a briefing material on Friday: “As far as we know, Naver and SoftBank have a 50/50 stake in A Holdings, but given the composition of the board, SoftBank has had almost-total control over LY since 2019. “

Industry insiders also note that the stake sale does not meet the goals of an early partnership between Naver and SoftBank to compete against their American and Chinese technology rivals.

Japan’s Ministry of Internal Affairs and Communications issued Line Yahoo privacy measures following a data leak involving more than 520,000 Line users and other administrative guidelines.

Although the data breach notes did not mention a sell-off, Line Yahoo said it should “review the relationship where the outsourced company has a significant degree of capital control,” according to Reuters, referring to Naver.

Japanese government guidelines require Naver to develop measures by July 1, so the stake sale is less likely to occur before the deadline, according to sources. However, SoftBank is known to have the upper hand as it already controls management and services.

By Lee Sang-duk, Ko Min-suh, Hwang Soon-min and Han Yubin

(ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved)