Wednesday, June 12, 2024

Background of the equity hegemony competition between Japanese companies (Softbank, Yafu Japan) and Korean government IT company ‘Naver’ Messenger


Analysts say that the Japanese government’s ambition to grow the artificial intelligence (AI) industry in earnest by pressuring Naver with administrative guidance, such as reviewing capital relations after Line Yahoo.


The Japanese government presents cases of information security in the name of administrative guidance, but it aims to foster its IT (information technology) industry through Softbank. In November last year, when Naver Cloud was infected with malicious code due to a cyber attack and personal information was leaked from Lineyahu, which shared some internal systems, Japan’s Ministry of Internal Affairs and Communications called for Lineyahu to improve its management system, including reviewing capital relations. Yoshimasa Hayashi, a spokesman for the Japanese government, also targeted Naver on the 15th, saying, “It is important that ‘customer management’ functions properly.” While the Japanese government is virtually pressing foreign private companies to sell their shares due to information security issues, Soo-yeon, CEO of Choi Naver, said, “The administrative guidance itself demanding a reduction in capital control is unusual.” According to the Ministry of Science and ICT, Lineyahu has been leading the management since 2021, when the management integration between the lines raised by Yahoo, Japan’s largest portal, and Naver as Japan’s “people’s messenger.” Although Naver and Softbank each own 50% of A Holdings, three Softbanks and two Naver, which are major shareholders of Lineyahu, are allocated the right to recommend directors, indicating that the management rights are under the control of Softbank. Japan’s persistent declaration of reducing Naver’s stake seems to be largely intended to erase Naver from Line Yahoo, even though Softbank actually controls its management. In fact, Softbank CEO Junichi Miyakawa expressed his intention to buy enough shares at a briefing on the 9th, saying, “If Softbank buys additional shares, there is a lot of free choice, but if it is 51% to 49, there will be no significant change.” In particular, some observers say that Japan may regard Naver as an obstacle to its growth as an AI hegemon.


Wi Jung-hyun, chairman of the Citizens’ Solidarity for IT Fairness (Davinci’s counterpart), said in a telephone interview with Yonhap News, “I think Japan’s AI policy is behind the Line incident,” adding, “Softbank seems to be trying to clean up its relationship with Naver in the AI business.” “Japan believes that Softbank is currently doing business with the structure of its stake in A Holdings, and Naver could be a potential threat,” he said. “Softbank intends to secure a large stake, and Naver may step up for this.”




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