Samsung heir's corruption retrial hangs over phonemaker

The heir to the Samsung empire returns to court this week for a retrial over a sprawling corruption scandal that could see him return to prison and deprive the world's largest smartphone and chip manufacturer of its top decision-maker.

Lee Jae-yong is vice chairman of Samsung Electronics -- where profits have been falling for months -- and was jailed for five years in 2017 for bribery, embezzlement and other offences in connection with the scandal that brought down South Korean president Park Geun-hye.

The 51-year-old was freed a year later after an appeals court dismissed most of his bribery convictions, but that decision was set aside by the Supreme Court in August, which ordered a retrial.

The new proceedings begin Friday and are likely to last for months.

At the same time, Samsung Electronics is battling challenges from the US-China trade war and tough export restrictions imposed by Tokyo on key supplies amid a dispute with Seoul over wartime history.

While the firm's daily business is managed by a board of directors, a leadership vacuum would greatly hamper its ability to make major decisions, KB Securities said in a report.

The retrial added to uncertainty for the company, said a source with direct knowledge, adding: "There are things that only Lee Jae-yong can do."