By Hyunsu Yim and Katya Golubkova
SEOUL (Reuters) – South Korea said on Saturday it will consult with Naver, after media reported that the domestic internet company was under pressure from Japan to divest from a venture, adding that its companies should not face discrimination.
The South Korean foreign ministry was asked to respond to a Kyodo news agency report earlier this week that Japan’s SoftBank Group was in talks to buy shares of LY Corp from Naver after administrative guidance from Japan’s internal affairs and communications ministry over a data leak last year.
“The Korean government is firmly in the position that there should be no discriminatory measures against our companies. We will check Naver’s position on the case and communicate with Japan’s side if necessary,” the ministry said in a statement.
LY Corp is majority owned by A Holdings, a joint venture between SoftBank and Naver, and operates Line, a messaging app popular in Japan and elsewhere in Asia.
The media report prompted concerns in South Korea over possible political interference, with two incoming lawmakers from the Rebuilding Korea Party urging the South Korean government to take “strong action”.
Japan’s internal affairs and communications ministry and SoftBank Group did not immediately reply to Reuters’ requests for comment.
LY Corp said earlier this month it received another administrative guidance following one in March from the ministry which said to accelerate “discussions on essential review of security governance involving the entire group, including the parent company.”
In November last year, the company admitted unauthorised access of its systems by a third party via Naver Cloud’s system which led to information leakage of more than 300,000 records of personal data about Line users among others.
Naver is cooperating with LY Corp to strengthen security, a representative said.
(Reporting by Hyunsu Yim in Seoul and Katya Golubkova in Tokyo; Editing by Muralikumar Anantharaman)
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