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Naver's data-driven financial business faces setback

Naver Financial CEO Choi In-hyuk speaks during a press conference at Naver Partner Square in Seoul in this July 2020 file photo. / Yonhap
Naver Financial CEO Choi In-hyuk speaks during a press conference at Naver Partner Square in Seoul in this July 2020 file photo. / Yonhap

By Park Jae-hyuk

Naver's grand plan of connecting its database with financial services is facing a major obstacle as the company's financial unit, Naver Financial, is unlikely to win the appropriate business license, due to an alleged breach of the law by its major shareholder.

The Financial Services Commission (FSC) said Friday Mirae Asset Daewoo, the second-largest shareholder of Naver Financial, was recently referred to the prosecution for an alleged violation of the Foreign Exchange Transactions Act.

The securities firm allegedly invested about 10 billion won ($9 million) abroad last year, without giving prior notice to the foreign exchange authorities. According to the law, those who invest over 1 billion won overseas without making a declaration to the foreign exchange authorities can be fined up to 100 million won or sentenced to up to a year in prison.

The FSC has to postpone the license screening of any applicant if their major shareholder is subject to financial authorities' sanctions, an investigation by the prosecution or other criminal suits.

This will prevent Naver Financial from getting a final approval for a MyData license, which would enable it to receive credit information on its customers from conventional financial firms, so that customers can access all their financial information in one place.

Naver Financial was able to get preliminary approval for the license last month because the Financial Supervisory Service was late in referring Mirae Asset Daewoo to prosecutors.

"If Mirae Asset Daewoo's alleged violation of the law is considered significant, the screening of Naver Financial will be halted," FSC financial data policy division head Park Joo-young said.

Last year, Naver Financial introduced plans to provide new services through the MyData license, but it will not be able to do these ― and some of its current services using customer data must be stopped ― starting from next month.

If Mirae Asset Daewoo is cleared of the charge or lowers its stake in Naver Financial to below 10 percent, Naver Financial will be able to receive the license. Mirae Asset Daewoo holds 30 percent of Naver Financial shares.

"We notified the authorities after making the overseas investments in accordance with the advice from a law firm. We did our best to comply with the relevant regulations," a Mirae Asset Daewoo spokesman said. "We will sincerely cooperate with the prosecutors' investigation."

Naver Financial said it will continue to make efforts to get a MyData license.

The FSC plans to give final approval for licenses to be issued at the end of this month to companies that satisfy all its requirements.


Naver Financial CEO Choi In-hyuk speaks during a press conference at Naver Partner Square in Seoul in this July 2020 file photo. / Yonhap
Naver Financial CEO Choi In-hyuk speaks during a press conference at Naver Partner Square in Seoul in this July 2020 file photo. / Yonhap

By Park Jae-hyuk

Naver's grand plan of connecting its database with financial services is facing a major obstacle as the company's financial unit, Naver Financial, is unlikely to win the appropriate business license, due to an alleged breach of the law by its major shareholder.

The Financial Services Commission (FSC) said Friday Mirae Asset Daewoo, the second-largest shareholder of Naver Financial, was recently referred to the prosecution for an alleged violation of the Foreign Exchange Transactions Act.

The securities firm allegedly invested about 10 billion won ($9 million) abroad last year, without giving prior notice to the foreign exchange authorities. According to the law, those who invest over 1 billion won overseas without making a declaration to the foreign exchange authorities can be fined up to 100 million won or sentenced to up to a year in prison.

The FSC has to postpone the license screening of any applicant if their major shareholder is subject to financial authorities' sanctions, an investigation by the prosecution or other criminal suits.

This will prevent Naver Financial from getting a final approval for a MyData license, which would enable it to receive credit information on its customers from conventional financial firms, so that customers can access all their financial information in one place.

Naver Financial was able to get preliminary approval for the license last month because the Financial Supervisory Service was late in referring Mirae Asset Daewoo to prosecutors.

"If Mirae Asset Daewoo's alleged violation of the law is considered significant, the screening of Naver Financial will be halted," FSC financial data policy division head Park Joo-young said.

Last year, Naver Financial introduced plans to provide new services through the MyData license, but it will not be able to do these ― and some of its current services using customer data must be stopped ― starting from next month.

If Mirae Asset Daewoo is cleared of the charge or lowers its stake in Naver Financial to below 10 percent, Naver Financial will be able to receive the license. Mirae Asset Daewoo holds 30 percent of Naver Financial shares.

"We notified the authorities after making the overseas investments in accordance with the advice from a law firm. We did our best to comply with the relevant regulations," a Mirae Asset Daewoo spokesman said. "We will sincerely cooperate with the prosecutors' investigation."

Naver Financial said it will continue to make efforts to get a MyData license.

The FSC plans to give final approval for licenses to be issued at the end of this month to companies that satisfy all its requirements.


Park Jae-hyuk pjh@koreatimes.co.kr


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