An investigation into the de facto head of Samsung Electronics , involving bribery at the highest levels of business and politics in South Korea, has sparked enormous concern here, where the company’s tentacles extend deep into daily life.
But regardless of the legal outcome, analysts say the allegations against Lee Jae-yong are unlikely to deeply harm his brand’s main global business: selling useful devices to consumers.
“Because they are very tilted to the consumer business, I don’t think this is going to have any impact at all,” said Patrick Moorhead, president and principal analyst Moor Insights and Strategy, a technology industry analyst firm. “Samsung’s senior leadership is not directly related to the global brand.”
Samsung, by far South Korea’s largest company, may be best known as the world’s top smartphone manufacturer, but it also is involved in life insurance, shipbuilding, medicine and more.
Lee, who holds the title of vice chairman but is considered the top executive and heir apparent at Samsung, has become ensnared in a legal drama over the actions of South Korea’s impeached president.
While the company’s sales may continue unabated, a court in Seoul is expected to decide on Thursday whether Lee, the grandson of Samsung’s late founder, should be arrested on charges that he improperly directed about $36 million to firms associated with a confidant of embattled President Park Geun-hye.
Prosecutors leading the sprawling investigation into a power abuse scandal that has upended South Korea’s political scene have accused Lee of facilitating a bribe to the president’s longtime friend, Choi Soon-sil, who has been jailed in the case amid allegations that she used her influence with Park to meddle in state affairs and extort funds from companies for personal gain.
In Samsung’s case, prosecutors allege that the funds were an effort to obtain approval for a controversial merger between two Samsung Group affiliates, an effort seen by some as a move to solidify Lee’s dynastic control of the company.
They sought his arrest on Monday after recently summoning Lee, 48, for a marathon questioning session — a process that forced the publicly reserved corporate executive to face a mass of reporters. “I am deeply sorry, and I apologize to the Korean people for failing to put our best face forward due to this incident,” he said.
Samsung officials reject the idea that the company contributed funds to receive favors, taking issue, in particular, with the suggestion that Lee’s succession or a merger were involved. “We believe the court will make the appropriate judgment on this matter,” said Rhee So-eui, a company representative.
Lee’s lawyer, Song Woo-chul, appeared confident about his client’s fate after the hearing. “We are certain the court will make a wise decision,” he said.
Bringing the charges was no small step for the prosecution because of Samsung’s dominance in South Korea.
