Japan pushing South Korea’s Naver to sell stake in Line: report

Photo credit: Line

The Japanese government is said to be “effectively” pushing South Korea’s Naver to sell its shares in Line’s holding company, Korean news outlet Hankyoreh reported.

Following a data leak that affected Line’s Japanese users, Japan’s Ministry of Internal Affairs and Communications issued orders to Line operator LY Corporation to reform its corporate structure, among other things. LY Corporation is a subsidiary of A Holdings, which is a joint venture of Naver and SoftBank Group.

While the Japanese government hasn’t explicitly asked Naver to sell its stake, local industry sources have taken the move to be an order for Naver to transfer its stake to SoftBank.

Japan’s Personal Information Protection Commission has also requested an investigation into Naver’s role in the Line data breach. The commission’s South Korean counterpart hasn’t responded yet, according to sources.

Korean insiders and experts have found it unusual for a foreign government to influence a domestic company’s actions, the report said. However, the South Korean government has remained mostly quiet.

While Line is headquartered in Tokyo and is Japan’s most popular messaging app, it began as part of a South Korean gaming company called NHN Corporation, which was Naver’s predecessor. Line has since grown far beyond a social app, having ventured into food delivery, digital banking, and blockchain.

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