Naver won't shed Line Yahoo equity in short term

Naver CEO Choi Soo-yeon attends the National Assembly’s parliamentary audit with the Science, ICT, Broadcasting and Communications Committee on Tuesday. [NEWS1]

Naver, Korea’s portal giant, will not be shedding its equity in Line Yahoo (LY) in the short term, according to the company's chief on Tuesday.

“We have decided not to proceed with the stake divestment [related to Line Yahoo] in the short term,” Naver CEO Choi Soo-yeon said during the National Assembly’s parliamentary audit with the Science, ICT, Broadcasting and Communications Committee.

Regarding the company’s long-term plans, Choi did not elaborate on the matter.

"As with all companies, it is difficult to provide a definite answer regarding long-term strategies,” she said.

Choi was called in for questioning to explain the latest Line Yahoo-Naver developments regarding the Japanese government’s pressure on the two companies to cut ties.

LY — 64.5 percent of which is owned by A Holdings, a 50:50 joint venture between Naver and SoftBank — is the Tokyo-based operator behind Japan’s top messaging app Line.

Meanwhile, Japan’s communications minister floated the possibility of implementing “additional measures if necessary” on Tuesday in response to Line Yahoo’s report that reducing Naver’s stake would be challenging in the short term.

Takeaki Matsumoto, Japan’s minister of internal affairs and communications, added that the administrative guidance issued in March and again in April concerns the national interest pertaining to “personal data protection” at a press conference held in Tokyo.

“We will take necessary action after thoroughly investigating the matter,” Matsumoto said.

LY released a report on Monday that it would be difficult to adjust the capital relationship between Naver and SoftBank in the short term, in response to the Japanese government’s directive requesting specific measures to reduce the reliance on Naver.

The report instead outlined specific plans to accelerate the process of severing cybersecurity ties with the Korean company and systematically transferring duties previously managed by Naver Cloud.

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