On the afternoon of May 9, 2024, people entered the Kioi Tower at Tokyo Garden Terrace Kioicho, home to Line Yahoo, in Chiyoda-ku, Tokyo, Japan. The previous day, Line Yahoo had announced its departure from Naver, formally requesting that the parent company step down as a co-majority shareholder. (Yonhap)
SEOUL, Jun. 23 (Korea Bizwire) –Masayoshi Son, the chairman of SoftBank Group, reportedly promised a senior member of Japan’s ruling party that he would take responsibility for making Line Yahoo “Japanese infrastructure,” according to a report by the Mainichi Shimbun newspaper on June 21.
The report sheds light on behind-the-scenes discussions between Son and Akira Amari, the head of the Liberal Democratic Party’s economic security promotion headquarters.
Their meeting is said to have taken place around March or April, coinciding with the Ministry of Internal Affairs and Communications issuing two administrative guidances to Line Yahoo, demanding enhanced cybersecurity measures following the leak of 510,000 individuals’ personal information.
The Mainichi Shimbun emphasized that Line is used by 97 million people in Japan and is also utilized for administrative services, suggesting that Amari’s sense of security crisis played a role in his request.
The administrative guidances, which included a request to review Line Yahoo’s capital relationships, sparked controversy over whether Japan was attempting to wrest control from Naver, Line Yahoo’s parent company.
During their meeting, Amari reportedly told Son, “While the method is up to you, please ensure that Japan’s infrastructure, from app development to everything else, can be done domestically.” Son is said to have responded, “I will take responsibility and do it.”
The report also reveals that the Japanese government separately summoned SoftBank’s president, requesting that SoftBank purchase Naver’s stake in Line Yahoo.
Masayoshi Son, the chairman of SoftBank Group, reportedly promised a senior member of Japan’s ruling party that he would take responsibility for making Line Yahoo “Japanese infrastructure,” according to a report by the Mainichi Shimbun newspaper on June 21. (Image courtesy of SoftBank)
“In its March administrative guidance, the Ministry of Internal Affairs and Communications essentially demanded that Naver’s shareholding ratio in Line Yahoo be lowered, transferring management control to SoftBank,” the Mainichi reported. “The ministry also separately summoned Junichi Miyakawa, SoftBank’s CEO, to repeatedly request cooperation.”
Currently, A Holdings, a joint venture established by Naver and SoftBank, owns approximately 65% of Line Yahoo’s shares. SoftBank and Naver each hold a 50% stake in A Holdings.
Responding to the successive interventions by the LDP and the ministry, a SoftBank executive expressed surprise, stating, “We felt the government’s strong will to review the capital structure, but we didn’t expect them to go this deep.”
The Ministry of Internal Affairs and Communications has maintained a contradictory position, asserting that while they called for a review of capital relations, they never explicitly requested a reduction in shares.
SoftBank Headquarters in Minato-ku, Tokyo, Japan (Yonhap)
These revelations indicate a deeper entanglement of the Japanese government and its politicians in the Line Yahoo matter than was initially understood.
Critics contend that the government’s intervention in a private company’s shareholding structure is reminiscent of actions usually seen in communist regimes.
This development raises serious questions about the boundaries between government intervention and corporate autonomy in Japan’s tech sector, potentially setting a controversial precedent for future interactions between the state and private enterprises.
M. H. Lee (mhlee@koreabizwire.com)
