Samsung Vice Chairman and „De Facto Leader“ Arrested

20.02.2017

Samsung’s Lee Jae-yong, which has basically been running the company since 2014, was arrested Friday last week on bribery charges. According to the New York Times, Jae-yong is accused of paying 36 million dollars to a person close to South Korea’s president in return for political favors. The arrest might have consequences for both Samsung and South Korea as a whole.


Samsung is responsible for about a fifth of South Korea’s exports. Besides being the largest information technology company, it is also the world’s second largest shipbuilder and owns significant shares in other markets as well.

Since the company is so huge, every little thing can have a negative PR impact on its stock. And it has already been “under fire” ever since the Galaxy Note 7 disaster. There were multiple reported accidents of the phone catching on fire, which eventually lead to the company pulling it back. However, it only did so after months and at a great cost for its reputation.

Adding to that now is the arrest of Lee Jae-yong. A lot of international pressure seems to rest on South Korea’s government to battle allegations of corruption and foul play between politics and the big family-owned conglomerates of the country. The New York Times call the arrest a victory for the prosecutor, who has been trying to establish a case against Samsung vice chairman for a while.

The company is denying all allegations. However, the arrest alone could lead to a vacuum at the management position of Samsung, essentially hurting their business. Experts say that acquisition deals and similar big moves might be delayed because of this new development.

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Source: https://www.nytimes.com/2017/02/16/world/asia/korea-samsung-lee-jae-yong.html?_r=0    
Pic: © 360b
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