November 24, 2024

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Lee Jong-ho, Minister of Science and ICT, speaks to reporters in Sejong on Wednesday. (Ministry of Science and ICT)

Korea will put Naver’s interest in the forefront in coming up with countermeasures to cope with the Korean IT firm’s conundrum of the Japanese government’s pressure on Naver to give up its ownership in Line, a leading messaging app in Japan that Naver has fostered for over a dozen years, the Korean science minister said Wednesday.

“Regarding Japan’s administrative guidance of (Line), we have been continuously and closely cooperating with Naver to guarantee the maximum rights of Naver’s decision making,” said Lee Jong-ho, Minister of Science and ICT, in a meeting with reporters.

“The Ministry of Science and ICT plans to counter (this issue) by putting the foremost value in ensuring that (Korean) companies’ foreign businesses and investments do not receive unfair treatment.”

The minister’s comment came after Japan’s Ministry of Internal Affairs and Communications issued administrative guidance on Line Yahoo Corporation, or LY Corp., the Japanese operator of Line, to review its capital relationship with Naver last month in the wake of a data breach incident of the messenger app in November last year.

Asked about somewhat lukewarm responses from Seoul’s presidential office and Ministry of Foreign Affairs, Lee said the government has been engaging in close discussions with Naver since last year.

“We are working with Naver as we continue to provide necessary support and respect (Naver’s) intentions,” said the minister.

“With all due respect to Naver’s decision, we will actively provide support in cooperation with government entities to solve problems in case of a diplomatic problem.”

Nearly 70 percent of the Japanese population uses Line for communication. A Holdings, a 50-50 joint venture between Naver and Softbank, owns LY Corp. and holds a 64.5 percent stake in Yahoo Japan.

Hayashi Yoshimasa, Japan’s top government spokesperson, said Tuesday that Tokyo’s administrative guidance on LY Corp. is about requesting the company to take actions such as strengthening safety management and reassessing security governance.

The spokesperson added that there could be various measures in regard to reassessing security governance but did not rule out the possibility of lowering Naver’s shares in the joint venture.

Naver noted in its earnings call on Friday that the Japanese government’s administrative guidance to demand the IT firm to sell its equity holdings is considered unusual, saying that it is working closely with both governments of Korea and Japan and will announce its stance after a decision is finalized after reviewing the issue from the mid- to long-term business plan of the company.

By Kan Hyeong-woo (hwkan@heraldcorp.com)