LY Corp., the operator of the Line messaging app, said Wednesday that Japanese telecom company SoftBank Corp. and Naver Corp. of South Korea are in talks on reviewing their shareholdings in the app provider following a massive data breach.

The two shareholders are discussing having Softbank take a majority stake, LY said, after Japan's Ministry of Internal Affairs and Communications called on LY to improve its operations through a review of its capital relationship with Naver.

"It is the major premise of the change that SoftBank takes a majority stake," LY President Takeshi Idezawa said at an earnings press conference.

As of October last year, LY was 64.5 percent owned by A Holdings Corp., in which SoftBank and Naver each held a 50 percent stake.

The ministry said in March that the app operator relies heavily on the South Korean company to operate the app system and is under "considerable influence" from Naver.

The talks follow the leakage of a total of about 520,000 items of personal data, including those related to the app's users and business partners, between November and February. Malware infected a server of LY's South Korea-based affiliate through a subcontractor's computer.

LY was formed in October 2023 through the merger of Z Holdings Corp. and its group companies Line Corp. and Yahoo Japan Corp.

LY said the same day that Shin Jung Ho, originally from Naver, will step down as a representative director subject to approval at a regular shareholders' meeting in June. He will focus on his role as chief product officer, it said.

==Kyodo

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