Samsung heir off the hook
- 19 January, 2017 10:31
After a troubled start to the year, Samsung has received some good news, with a South Korean court reportedly dismissing an arrest warrant for the company’s vice-chairman and de facto head, Lee Jay-yong, over allegations of bribery and embezzlement.
The decision came early on 19 January, according to Reuters, with the Seoul District Court indicating that an arrest at this time is not necessary.
Lee had been questioned by authorities for over 20 hours the previous week and was held overnight on 18 January as the court reached its decision, according to Reuters.
News of an application by South Korean prosecutors for Lee’s arrest emerged on 16 January, after it was alleged that he participated in payments made by Samsung to a friend of South Korea’s embattled president, Park Geun-hye, to help garner government support in the company’s succession planning.
The move to release Lee and dismiss the warrant for his arrest will no doubt have Samsung’s top-tier leadership team breathing a sigh of relief, with the prospect of seeing the son of Samsung’s septuagenarian chairman, Lee Kun-hee, potentially embroiled in a drawn out legal battle casting a shadow over the company’s future leadership plans.
Samsung's vice-chairman has been viewed as the Samsung’s de facto leader since Lee Kun-hee was hospitalised in 2014 due to illness, and the company would have faced a potential leadership vacuum if Lee found himself at the mercy of prosecutors.
The good news comes after a rocky year for Samsung, with the company still recovering from last year’s Galaxy Note7 debacle, its subsequent recall of millions of devices around the world, and a slew of lawsuits over the matter.
The company is also facing the prospect of a major split into two separate entities, and working out if it should undertake new public offerings after agitation by activist hedge fund, Elliot Management.
“Samsung Electronics has taken steps to simplify its business to concentrate on core capabilities in the past several years and the company continues to review opportunities to optimise long-term value,” Samsung said in a statement late last year.
“This includes the possibility of creating a holding company structure and the potential benefits and feasibility of listing the company’s shares on additional international exchanges,” it said.