No agreement yet with Naver on Line Yahoo stake reduction, SoftBank CEO says

SoftBank's headquarters in Tokyo [YONHAP]

SoftBank and Naver have yet to reach an agreement regarding the reduction of the Korean company’s equity in Line Yahoo (LY), the Tokyo-based operator behind Japan’s top messaging app, Line.

SoftBank CEO Junichi Miyakawa said at a general shareholder meeting on Thursday that the two companies are still “continuing discussions” regarding the matter.

"At the request of Line Yahoo, we continue discussions with Naver on security governance and business strategy," Miyakawa said.

“In response to the request from Line Yahoo, we are continuing discussions with Naver in terms of security governance and business strategy,” he explained. "Although we have not reached an agreement at this time, we are committed to securing Line Yahoo's future. [However], since there are other stakeholders involved, we cannot provide an exact date for reaching an agreement."

LY is 64.5 percent owned by A Holdings, a 50:50 joint venture between Naver and SoftBank.

On Tuesday, LY CEO Takeshi Idezawa announced plans to accelerate Naver's separation from LY's employee systems and authentication managed by subcontractor Naver Cloud, aiming to complete the transition by March 2025.

The move comes in response to an administrative guidance issued to LY by Japan’s Ministry of Internal Affairs in March and April pressing the Tokyo-based unit to cut cybersecurity and capital ties with Naver.

LY has a deadline of July 1 to respond to the request.

The pressure was sparked by a data breach incident in October that resulted in the leak of some 510,000 items of personal information about users, business partners, employees and other personnel through Naver Cloud.

The Korean government stated last month that matters regarding equity sales will not be included in the July 1 report, but both SoftBank and Naver had confirmed that they are “exploring all possibilities,” including stake divestment in LY.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]