The past several months have been a bit rough for South Korean technology giant Samsung. Late last year, the company was forced to suspend sales of the Samsung Galaxy Note 7, the most technologically advanced, feature-packed, and impressive phone the company has ever put out, due to an epidemic of the phone’s batteries catching fire and/or exploding for no apparent reason. The company was forced to halt production of the phones and recall the remaining phones that were still in use. The whole ordeal cost Samsung an estimated $17 billion in revenue, and likely tarnished their brand considerably.
Unfortunately for Samsung, however, the Galaxy Note 7 fiasco wasn’t the last of their troubles – Samsung’s acting chief and third-generation leader Lee Jae-yong was arrested Friday in Seoul, South Korea, accused of bribery and embezzlement in a high-reaching corruption scandal.
Lee’s arrest comes just two months after the South Korean National Assembly passed a motion for the impeachment of President Park Geun-hye after evidence of widespread corruption was brought to light. Park was accused not only of allowing her close friend and spiritual adviser Choi Soon-sil, daughter of a cult leader, to influence government policy and access confidential documents, but also of colluding with Choi to extort nearly $100 million from a number of large South Korean businesses.
Lee was arrested for his role in the scandal, accused of bribing Choi, according to Reuters “to gain government favors related to leadership succession at the conglomerate. Lee will also be facing charges of embezzlement, perjury, and hiding assets overseas. Lee was taken into custody Friday and detained in a single cell at the Seoul Detention Center — a move that has been called “unprecedented”, as powerful executives are often given favorable treatment in such matters.
According to Reuters, prosecutors have up to ten days to indict Lee, although they can seek an extension. “After indictment, a court would be required to make its first ruling within three months.” Samsung and Lee both deny any wrongdoing in the case. In the meantime, Lee’s right-hand man and second in charge at Samsung, Choi Gee-sung will assume temporary control of the company. It will be interesting to see how the electronics giant will recover after two major scandals in one year.