Navigating Corporate Diplomacy: Naver Stands Firm Amidst Japan Pressure
In the bustling corridors of Korea’s tech landscape, Naver, a prominent player, is currently at the heart of a corporate tussle with international implications. A senior presidential official has indicated that despite the Japanese government’s pressure on Naver to divest from LY Corp., the operator of the widely-used messaging app Line, there are no immediate plans for a share sale.
It appears that after thorough discussions with Naver, the Korean tech giant has relayed its intent to maintain its stake in LY Corp., at least until July. This decision comes as a response to an administrative guidance from Japan, which prompted a review of the capital relationship between Naver and LY Corp. after a considerable data breach last November.
The Japanese government’s intention behind the guidance has been a subject of speculation, with denials that it is aimed at forcing Naver’s hand. However, SoftBank, Japan’s telecom behemoth and a joint venture partner in LY Corp., has been reviewing its capital ties with Naver, with a decision expected by July.
Adding to the complexity, LY Corp. is set to submit a report on its response to the Japanese government’s guidance on July 1. This report will notably exclude any mention of a sell-down, as clarified by a Korean official.
The situation has evolved beyond corporate maneuvering, with the Korean government advocating for Naver to present a clear and comprehensive position. Naver’s initial reticence to articulate its stance was perceived as a strategic move to bolster its position in negotiations with SoftBank. This silence, however, sparked criticism from opposition parties, accusing the government of failing to protect Korean corporate interests.
As tensions rise, the Yoon administration finds itself at a crossroads, balancing the drive for amicable relations with Japan and addressing domestic concerns over Japanese influence.
Amidst reports that political frictions surrounding the Line dispute are resolving, questions linger about Naver’s future actions. The presidential office’s comments don’t explicitly confirm a definitive end to Naver’s sell-down plans or the culmination of discussions with SoftBank.
Choi Soo-yeon, Naver CEO, underscored that any decisions will align with the company’s long-term strategy. Signals suggest that the dialogue with SoftBank might extend beyond the July timeline.
While Naver aligns with the presidential office’s stance against an immediate sell-down due to Japanese pressure, the company has not dismissed the possibility of a future transaction. In seeking confirmation, a Naver spokesperson reiterated the company’s open-ended position, stating that all options are being considered in ongoing talks with SoftBank.
