Samsung, the world's leading microchip and smartphone maker, was in shock after its de facto head was arrested on bribery and other charges over his role in a corruption scandal that has fueled widespread public fury.
Business circles have voiced concern that the arrest of Samsung Electronics vice chairman Jay. Y. Lee would hurt the international credit of Korea Inc.
Lee's imprisonment came ahead of Samsung's launch of its new flagship smartphone, Galaxy S8, probably in April. The company has thrown all its efforts into developing the new phone as redemption for its combustible Note 7 fiasco that has damaged its brand value and reliability.
Experts say a good product alone will not be enough to lure consumers because they consider moral and ethical standards in evaluating the value of a company.
The 48-year-old only son of Samsung Group's bedridden patriarch Lee Kun-hee, 74, became the first business leader to face imprisonment in connection with the corruption scandal involving President Park Geun-hye.
For his smooth power succession, Samsung has promised to improve corporate governance and introduce a holding company. The group has also sought a change in its business strategy to focus on futuristic businesses like bioengineering, smart auto parts and batteries.
In November last year, Samsung acquired Harman International Industries, a US-based global leader in connected car technology, for about eight billion US dollars. Harman provides infotainment and car security systems for BMW and Mercedes-Benz.
It was the biggest acquisition of foreign companies by a South Korean company, and Samsung was upbeat at the time, saying the deal would help the world's largest smartphone and microchip producer diversify its business portfolio into the rapidly growing market for connected technologies and auto electronics.
The acquisition marked Samsung's biggest investment outside South Korea under the leadership of the junior Lee who has sought to realign Samsung's bloated structure before making his official debut as group leader.
US investors, however, filed a lawsuit opposing Samsung's proposed takeover of Harman International, claiming it was sold too cheaply via an unfair process. The deal requires a majority of votes at a meeting of shareholders.
Lim Chang-won = email@example.com