TOKYO - Japanese messaging app Line, owned by SoftBank Corp’s Z Holdings Corp, allowed Chinese engineers at a Shanghai affiliate to access data on Japanese users without gaining their consent, Japanese media reported on Wednesday.

“There hasn’t been anything that breached legal or regulatory boundaries,” a spokesman for Line said. “We always put ourselves to a standard were we want to be as transparent as possible.”

The reports come after Line this month became part of Z Holdings, formerly Yahoo Japan, creating a $30 billion domestic internet heavyweight to compete against local and US rivals.

Four engineers at a company in China that performs system development for Line were allowed to access servers that contained the names, phone numbers and e-mails of users, the Asahi newspaper said.

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Messages themselves can only be read by the sender and receiver as Line, like other messaging apps, encrypts message content end to end.

Z Holdings is controlled by SoftBank Corp through holding company A Holdings, which is jointly owned by SoftBank Corp and South Korea’s Naver Corp, the former operator of Line.

Z Holdings announced the Line tie-up last year but was delayed from October because of the Covid-19 pandemic.

Shares of Z Holdings dipped 2 per cent in morning trade to 605.5 yen (S$7.50), compared with the Tokyo exchange’s TOPIX index which was flat.