Prolonged imprisonment of top executive casting cloud over Samsung

The heir to South Korea's largest family-run conglomerate Samsung Group, which encompasses the world's largest smartphone manufacturer, is suspected of providing favors to Park's confidante in return for winning approval for the group's restructuring efforts from South Korea's state pension fund. The pension fund holds significant stakes in the group's affiliates that were merged.

While Samsung has been maintaining its routine businesses, releasing the Galaxy S8 smartphone earlier this year, industry watchers said the absence of Lee, who is involved in all key decisions, may emerge as a major drag in terms of future strategies amid intensifying challenges from industrial late-comers.

Samsung Electronics' move to seek mergers and acquisitions as well as allocating major investment has been hindered by the imprisonment. There have been no new acquisitions made by Samsung since the company bought Harman International in November last year.

Industry watchers said Samsung is set to post robust earnings for the second quarter on the back of the global boom of chip industry, but the company still needs to come up with a sustainable growth plan going forward.

"Samsung's current heyday was made possible through its future strategies made three to five years ago," a company official said.

"It is hard to predict what kind of side-effects the company will face three to five years later amid the absence of the leader at this critical juncture." (Yonhap)