UPDATE 2-Japan messenger app Line let engineers in China access user data without consent -media

Adds company comment, detail

TOKYO, March 17 (Reuters) - Japanese messaging app Line, owned by SoftBank Corp's 9434.T Z Holdings Corp 4689.T, 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 U.S. rivals. nL2N2KZ0H6

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.

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 035420.KS, 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% in morning trade to 605.5 yen, compared with the Tokyo exchange's TOPIX index which was flat.

(Reporting by Tim Kelly, Takashi Umekawa and Chang-Ran Kim; Editing by Himani Sarkar and Christopher Cushing)

((ran.kim@thomsonreuters.com; +81-3-4520-1228))