Line Yahoo Corp. (LYC) on Monday submitted a report to the Japanese Ministry of Internal Affairs and Communications regarding its administrative guidance that directed Line operator’s parent company, A Holdings, to review its capital relationship with Naver. A Holdings is a 50:50 joint venture between Naver and SoftBank.
According to sources, LYC reported that short-term capital movement between the two companies is difficult.
However, LYC confirmed in the report that it will continue discussions over the proposed sale of Naver’s stake, they added.
The guidance was issued after a massive data breach from Line late last year.
About 519,000 cases of personal information were leaked from Line in November 2023 following a malware infection on a server belonging to Naver Cloud. Naver Cloud had provided Line Yahoo with an internal system for managing user personal information.
LYC is still expected to accelerate the separation from Naver, despite the Line messenger currently using Naver's technology.
The report specifies that LYC will separate its internal systems used by employees from Naver by March 2025 and will move up the separation of its systems at overseas subsidiaries to March 2026, changing the previous deadline from December 2026.
LYC will sequentially end services that were outsourced to Naver, including service planning and development. Services outsourced to Naver and Naver Cloud will be completed by December 2025.
The Japanese Ministry of Internal Affairs and Communications has not expressed any particular stance regarding the report.
Launched by Naver in June 2011, Line has grown to attract 96 million monthly active users (MAUs) in Japan and 200 million users across Asia, including Thailand, Taiwan, and Indonesia, as of May.