Japan’s LINE Yahoo (LY) Corporation announced plans to fully separate its IT systems from South Korea’s NAVER and end its service outsourcing relationship with NAVER by the end of this year. Japan’s SoftBank will replace the company’s board of directors to speed up the ‘de-NAVERization’ process.
“LINE Yahoo will complete the certification-based separation of NAVER Cloud and employee systems by the end of this year,” LY Corporation CEO Takeshi Idezawa said at a shareholders’ meeting in Tokyo on Jun. 18.
Idezawa added that the company aims to finalize the separation of NAVER and its systems by fiscal 2026 but is working to expedite the process.
“In the service business, we will also terminate our outsourcing relationship with NAVER in almost all of our domestic (Japanese) service business areas,” Idezawa said. Addressing concerns over data privacy, LY confirmed it is moving user data from South Korea to Japan. Personal information on the LINE app, including names, phone numbers, email addresses, and IDs, is now managed on Japanese servers according to local data governance standards.
The company recently announced the closure of its LINE Pay service in Japan, with balances to be transferred to SoftBank-operated PayPay.
During the shareholders’ meeting, LY restructured its board to include a majority of independent directors. The board now consists of four inside directors and three outside directors, compared to the previous composition of two inside directors and four outside directors.
The reorganization aims to enhance LY’s management independence and disentangle its ties with NAVER. Chief Product Officer Shin Joong-ho, the sole NAVER representative at LY, will step down, leaving a board composed entirely of Japanese members representing SoftBank’s interests.
Two inside directors were re-elected: LY Chairman Kentaro Kawabe and LY CEO Takeshi Idezawa. Outside directors, Yoshio Usumi, a former director of Nomura Research Institute, and lawyers Maiko Hasumi and Tadashi Kunihiro were re-appointed. Yuko Takahashi, an outside director of Microwave Chemical, was also newly appointed.
However, at the meeting, LY did not specifically address the expected review of its capital relationship with NAVER. In a pre-meeting questionnaire response, LY stated it “has not decided” to reassess its capital relationship with NAVER but is “requesting the parent company to consider it.”
A swift separation from LY would reduce NAVER’s presence in the Japanese market. NAVER currently holds a 50/50 split with SoftBank in LY’s holding company, A Holdings, which owns a 64.5% stake in LY. If NAVER sells its stake in A Holdings, control will shift to SoftBank.
