Lee Hae-jin, the founder of South Korean internet giant Naver, has officially stepped down from the company’s board, Naver said in a disclosure Monday.

During an internal board meeting held the same day, Naver decided not to extend Lee’s board membership that expires next month. Naver’s executive director Choi In-hyuk will be filling in Lee’s position, according to the firm.

With the change, Lee will only retain his position as global investment officer, focusing on Naver’s global expansion and investment agendas.

The development follows Lee’s decision to resign from Naver’s board chairmanship in 2016. The move is also widely speculated to be linked to Lee’s previous efforts to avoid being designated as Naver’s effective leader, or “owner” as it is referred to in Korea, with overwhelming control over the firm.

Under Korean law, those perceived as the “owner” of a large company are required to follow a variety of specialized antitrust regulations and duties. The rules were initially created to enhance corporate transparency among Korea’s conglomerates, most of which are family owned.

Lee has previously sought to avoid this “owner” designation, by claiming he possesses a low stake of about 4 percent in the company and is not involved in any form of circular shareholding involving family members.

Naver has also argued that the company operates on a transparent management system based on an elected CEO and board, and thus deserves to be considered an “ownerless” company.

But in September 2017, South Korea’s Fair Trade Commission designated Naver, operator of Korea’s biggest portal website, as a “large corporation” with assets of more than 5 trillion won ($4.66 billion), with founder Lee as the effective owner.

The FTC had made the decision on grounds that despite his seemingly low stake, Lee is the only one among Naver’s large stakeholders who is engaged in top-level decision-making activities.

Right now, the National Pension Service is Naver’s biggest shareholder with a 10.5 percent stake. A group of foreign investors make up the second-largest shareholder, while Lee is the third-largest shareholder with a 4.31 percent stake.

Despite their majority ownership, the NPS and the foreign investor group have disclosed that they do not exert managerial control over the company, according to the FTC.

By Sohn Ji-young (jys@heraldcorp.com)