Samsung Group heaved a sigh of relief Thursday, as a Seoul court rejected a request by a special counsel to arrest the group’s heir apparent Lee Jae-yong. However, the company expressed concerns over its business prospects, citing the possibility of the ongoing probe continuing to create a leadership vacuum.

“The group has avoided the worst-case scenario, but is still facing an ongoing probe and a series of trials afterward. It will take quite a considerable amount of time, possibly suspending new businesses led by the group,” said an official at Samsung Group’s future strategy office.

In 2008, a team of special prosecutors probed the group over allegations involving slush funds and embezzlement. The official said Samsung might go through a similar process again. 

Lee’s father, Samsung Group Chairman Lee Kun-hee, left the firm’s management soon after the probe in 2008, returning in 2010 with a list of new business plans that included strategies to tap solar panels and the light-emitting diode sectors. However, due to the two-year leadership vacuum, Samsung has since failed to take the lead in the two segments, said the official.

“It keeps reminding me of the time the group went through the probe. Samsung Electronics is being operated separately by CEOs responsible for each business segment, but in order to push for a large scale new business, the group needs a decision by the leader,” he said, adding that the junior Lee has not even had an opportunity to prove his leadership, as the scandal flared up only a few weeks after he joined the boardroom of Samsung Electronics as a registered member.

From corporate restructuring to major mergers and acquisitions, the 48-year-old heir was gearing up to prove his leadership amid mixed market reactions on the firm’s succession process.

The nation’s largest conglomerate has not been able to move forward, with a team of special investigators zeroing in on allegations that Lee requested President Park Geun-hye to help speed up the succession process in exchange for favors to her close friend Choi Soon-sil. Lee has also been banned from leaving the country since late last month.

After the court rejected the special counsel’s request for an arrest warrant, Lee was released from a detention facility early in the morning and went straight to Samsung Group’s headquarters in Seocho, southern Seoul. He held a meeting with executives from the group’s future strategy office, the official said.

Business circles also welcomed the court’s decision, saying the ruling was made by reviewing facts thoroughly.

Business lobby groups -- including the Korea Employers’ Association and the Korea International Trade Associations -- had urged the court not to approve the request to arrest Lee and urged investigators to proceed with their probe without detaining him, saying putting the de facto leader of the nation’s largest conglomerate in jail would negatively affect the Korean economy. Samsung’s output accounts for one-fifth of the South Korean economy.

Despite lingering concerns, market reformists urged for a prompt investigation, saying the ongoing probe could be a chance to break down the chaebol system, which has been blamed for infringing shareholder rights and transparency of overall business operations.

“Lee Jae-yong must face trials and punishment if he is found to have committed wrongdoings such as making a deal with the president,” said Park Ju-gun, the CEO and founder of CEOScore, a local corporate watchdog.

“This is the chance to break down the chaebol system. Korean companies like Samsung won’t survive if the current governance system enters the era of the fourth industrial revolution because it is all about transparency and openness.” 

By Cho Chung-un (christory@heraldcorp.com)