Line Yahoo executives quell fears of disadvantages for Korean employees

Line Yahoo executives joined an internal online briefing and assured Korean employees that they will not face discriminatory disadvantages.

An employee of Line Plus, Line Yahoo’s Korean subsidiary, enters the company’s headquarters in Pangyo, Gyeonggi, on Tuesday. [YONHAP]

C-suite executives from Line Yahoo (LY) assured Korean workers that they “won’t be subject to discriminatory disadvantages” as a result of Tokyo’s pressure on Naver to trim its equity in the operator behind Japan’s popular messaging app Line.

The assertion was made during an internal online briefing convened by Line Plus, LY’s Korean subsidiary, on Tuesday evening. An array of executives including CEO Takeshi Idezawa, Chief Product Officer (CPO) Shin Jung-ho, Line Plus CEO Lee Eun-jung and Line Financial CEO Hwang In-joon participated along with 1,500 LY employees.

It was the first time the top-level executives have addressed the matter directly with employees since Naver stated on Friday that discussions are underway with Japan’s SoftBank “to explore all possibilities,” including a divestment of its stake in LY, in response to the Japanese government’s administrative guidance calling for remedial measures in the wake of a user data leak.

“There won’t be any discrimination against Korean employees,” Lee emphasized, according to an exclusive report from the JoongAng Ilbo. “If workers at LY Corporation are treated unfairly, we will leverage our authority to address it, and this sentiment is shared by all executives present in this meeting.

"We are employees of Line, not Naver,” Lee reiterated. “While we maintain a special relationship with Naver, we pay sufficiently for the services we use — it’s simply that we make greater use of services provided by the Korean company due to our relations, but it’s important to recognize that Line and Naver are separate entities.”

The LY CEO said the company’s top priority is to resolve the issue with the Japanese government.

Japan’s Ministry of Internal Affairs and Communications issued guidances in March and April requesting LY to pare back Naver’s ownership in the company and come up with specific measures by July 1.

The pressure was sparked from a data breach incident in October that leaked some 510,000 items of personal information about users, business partners, employees, and other personnel through its subcontractor, Naver Cloud.

“The government’s request may sound unfair, but the security breach was our fault,” Idezawa said. “We’re sorry to provoke anxieties, but please understand that Line is regarded as an important service by the Japanese government.

“The new services that we are planning to release are being prepared accordingly by our CPO, Shin Jung-ho, and global business development is proceeding smoothly without interruption.”

Shin, the sole Korean member of LY’s board of directors, also logged online during mid-session. He will resign from the position of internal director next month.

“There has been ongoing concern about the proportion of foreign directors in the past, and we assessed that this was the opportunity, following the administrative guidance, to address it,” Shin responded when asked about his resignation. “Now it has become essential to engage in discussions with the Japanese government and work through this, and it would be better if someone else takes the lead instead of me.”

The executives also addressed potential job insecurities raised by Naver’s labor union on Monday. The union fears job losses and a possible leak of the company’s top technological assets if the Korean internet platform giant's stake in LY is transferred to SoftBank.

LY is 64.5 percent owned by A Holdings, a 50:50 joint venture between Naver and SoftBank.

Lee emphasized that the current top priority is Line’s survival.

“We can certainly ensure the short-term safety of our employees’ positions, but it’s difficult to provide answers about the long term,” Lee said. “Long-term employment is only guaranteed if survival is assured.”

A Korean government official said on Tuesday that Naver may not even include the option of divestment in the report of measures that LY submits to the Japanese government by July 1, in contrast to public speculation that the company will accede to Tokyo’s request.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]