"Hard to Specify Exact Timing of Agreement"
Discussions on Stake Sale Continue... Separation Stance Reconfirmed
No Comments from Chairman Son Jeong-ui on Line Yahoo Incident
SoftBank announced on the 20th that it has not yet reached an agreement with Naver regarding the review of the capital relationship of its subsidiary Line Yahoo. However, it reaffirmed its previous stance on parting ways with Naver while stating that discussions on share sales will continue. Attention was focused on whether SoftBank Chairman Masayoshi Son would make a statement on the capital relationship review, but there was no mention.
Junichi Miyakawa, CEO of SoftBank, responded to questions about Line Yahoo's capital relationship at the regular shareholders' meeting held that day, saying, "We are continuing discussions with Naver from the perspectives of security governance and business strategy," and added, "Although we have not reached an agreement, we will do our best with the future in mind."
He continued, "Since there are multiple parties involved, I cannot specify an exact timeline for when an agreement will be reached, but we will continue to discuss this matter."
CEO Miyakawa also stated that SoftBank will collaborate with Line Yahoo through its simple payment service PayPay. He said, "We will combine the strengths of SoftBank and Line Yahoo to promote joint projects such as PayPay."
At the shareholders' meeting that day, attention was drawn to whether Chairman Masayoshi Son and others would mention the shareholding relationship with Naver, but no related content appeared. Chairman Son spoke about generative artificial intelligence (AI), the Vision Fund, and investments.
Naver and SoftBank each hold a 50% stake in A Holdings, the largest shareholder of Line Yahoo. Last year, it was announced that there was a possibility of leakage of about 510,000 personal information records from Line Yahoo, and subsequently, Japan's Ministry of Internal Affairs and Communications demanded countermeasures through two administrative guidances in March and April. At the same time, there was controversy as they also demanded a review of the capital relationship with Line Yahoo. In response, SoftBank announced last month its intention to negotiate a capital review with Naver. Naver also stated that it is negotiating with all possibilities, including share sales, open.
Line Yahoo is accelerating its severance from Naver. Earlier on the 18th of this month, Takeshi Idezawa, CEO of Line Yahoo, stated at the regular shareholders' meeting, "We will complete the separation work of employee systems and authentication, which were entrusted to Naver Cloud, within this year." The original plan was to separate systems from Naver by 2026, but this has been expedited.
Line Yahoo also passed a proposal to exclude Shin Jungho, Chief Product Officer (CPO) from Naver, who is called the "Father of Line," from the board of directors. The board composition was changed from four internal directors and three external directors to two internal directors and four external directors. As a result, the board is now entirely composed of Japanese members.
Furthermore, Line Yahoo announced on the 13th of this month that it will terminate the Line Pay service and unify services under PayPay. To improve business efficiency, Line Yahoo plans to sequentially terminate the Line Pay service by April 30 next year. Line Pay started its service in Japan in December 2014, providing mobile simple remittance and payment services, and as of last month, it had secured over 44 million users. However, services in Thailand and Taiwan will be maintained as is.
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