[THE INVESTOR] Despite better-than-expected profits that it recorded during the October-December quarter in 2016, tech giant Samsung Electronics has expressed concerns over its future growth in the face of the current tumultuous political and business landscape.
Announcing its fourth-quarter earnings on Jan. 25, the tech giant said the company would likely encounter difficulties in finding new growth engines and executing investment plans, including those for new merger and acquisition deals, due to the negative business environment.
“Samsung is worried of the potential consequences of the current political issues regarding the top executives’ long-term management decisions to find future growth engines,” said a Samsung executive in a conference call.
The reference was the ongoing prosecutorial probe against President Park Geun-hye and her confidante Choi soon-sil and their alleged link with Samsung.
Samsung has been accused of offering financial support for Choi’s bogus businesses in return for political and business favors, including the backing for the contentious merger between Samsung C&T and Cheil Industries in 2015.
The special investigation team in charge of the probe sought an arrest warrant for Samsung heir and Vice Chairman, Lee Jae-yong earlier this month, but a Seoul court declined the request, citing the lack of solid evidence over his bribery charges and the potential leadership vacuum at the group, which accounts for more than 10 percent of Korea’s gross domestic product.
The investigation against Lee over bribery charges are still underway, which the tech giant said blocks the firm from making core management decisions.
Samsung has announced in recent months the acquisition of artificial intelligence firm Viv Labs and audio system developer Harman, part of its investment plans in emerging technologies.
Some market analysts forecast the Korean tech firm will have to halt its further investment decisions due to the ongoing probe against the presidential scandal.
Samsung said in its regulatory filing on Jan. 25 that its operating profit jumped 50.1 percent to 9.22 trillion won (US$7.92 billion) in the fourth quarter last year with its quarterly sales coming in at 53.33 trillion won.
The annual operating income stood at 201.87 trillion won with the operating profit coming in at 29.24 trillion won.
By Kim Young-won (email@example.com)