2016 is not turning out to be a good year for South Korean electronics manufacturer Samsung, as hot on the heels of their Galaxy Note 7 fiasco comes news that South Korean prosecutors have raided the firm’s headquarters. Officials are in search of evidence the company might have illegally offered gifts to Choi Soon-sil, who faces charges of profiting from her connections to President Park Geun-hye.
The raid in Suwon follows an unsourced report from Yonhap News, claiming that Samsung provided 3.5 billion won ($3 million) to a company owned by Choi to fund equestrian training in Germany for her daughter, according to Bloomberg. Choi and Park have a long friendship together, but Choi was arrested on Nov. 3, and Park is under pressure to resign from thousands of protesters on the streets.
Samsung is a major corporate force in Korea, its 2013 revenue was worth 17% of the country’s entire Gross Domestic Product. While the company is a familiar name in electronics and appliances in the United States, the firm also has its corporate tentacles in a number of industries, including fashion, insurance, construction, and more.
While the south Korean prosecutor’s raid doesn’t mean Samsung actually did wrong by extending financial gifts to Choi, the investigation adds a few more lumps to the company’s public visage that has already been marred by the Galaxy Note 7 fiasco, as well as reports of nine injuries due to defective Samsung branded washing machines.
The recall and permanent shutdown of production for the Note 7 is expected to cost Samsung at least $5.3 billion, and there is no word yet on how much the washing machine-related issues will cost the firm. Samsung faces a bit of brand image rebuilding ahead of it, and that will likely be a slow and deliberate process for the electronics giant.