Lee Yong-woo: "Line Incident Violates Corporate Rights... Naver Faces Breach of Duty if No Response"

"If Naver Does Not Respond Actively, It Could Be Considered Breach of Fiduciary Duty"

Lee Yong-woo, a member of the Democratic Party of Korea, emphasized regarding the 'Line Yahoo incident' that "the essence of the case is that the basic rights and interests of Korean companies are being infringed upon," and stated, "The government must raise a strong voice to stop discriminatory treatment against Korean companies."

Lee Yong-woo, Democratic Party of Korea lawmaker. Photo by Dong-joo Yoon doso7@

On the 13th, Lee appeared on MBC Radio's 'Kim Jong-bae's Focus' and said, "According to the Korea-Japan Investment Agreement, Korean companies should not be treated differently from Japanese companies and actions should be taken based on legal grounds," adding, "The government's most basic requirement is to protect its citizens and domestic companies, but despite the agreement, it did not make appropriate statements."

He continued, "The Vice Minister of Science and ICT used the expression 'if it is perceived as a share sale,' and if you read the administrative guidance letter from Japan's Ministry of Internal Affairs and Communications, that phrase clearly appears," criticizing, "(Our government) is showing a very passive attitude."

Lee also diagnosed that the government is only expressing a principled stance on the Line Yahoo incident, and Naver is responding lukewarmly. He said, "From Naver's perspective, since their interests have been infringed, they should actively fight back, but they hesitate, wondering if the country has a different view," adding, "Looking at the internal reaction at Naver, the people involved in this business are very angry."

He said, "The management is watching the (government's) reaction," and warned, "However, the fact that internal management is taking such actions itself could lead to very serious legal issues. Corporate executives must act to increase the company's value and act according to regulations, but if they fail to take necessary measures, causing Naver's stock price to fall and harming shareholders, there is a possibility of a breach of trust lawsuit under the Capital Market Act."

Furthermore, Lee said that if a dispute arises through the Investor-State Dispute Settlement (ISDS), the fact that the government and Naver responded strongly will work favorably in court. This is because it can be argued that Naver was pressured by the Japanese government to sell its Line Yahoo shares and suffered damages as a result. Lee stated, "Only if the government and Naver's management take active steps can they claim in a lawsuit, 'We did not want to sell later, but were forced to sell,' and a clear external message is necessary."