A shocking decision that's delivered a major blow to Korea's most powerful business group.
For the first time, a Samsung Group chief executive has been arrested since the conglomerate was established 79 years ago.
While the group said in a statement that it will do its best to uncover the truth in future court proceedings, its management team is scrambling for its next move.
The decision-making Future Strategy Office launched an emergency management system just hours after the court's approval of the arrest warrant.
But with Lee behind bars, all matters that require his approval seem to have reached a full stop.
Some of the immediate issues like creating a holding company for Samsung Electronics as a way to streamline the ownership structure, and a major investment plan involving Harman International Industries are likely to be put on ice.
"The management reshuffle will take more time, given the situation. Other management deals like M&As will also take more time than initially expected. But the schedule delays aren't expected to have a direct effect on the company's performance."
The analyst also said the jitters rippling through the markets are likely temporary and the stock market will soon pick up based on the conglomerate's business performance, rather than the management changes.
However, the current turn of events will dent the world-class conglomerate's reputation, and surely hindering the group's leaps into the future.
"And the ripple effects, not only for Samsung Group, but also for the country's business circles at large, are only beginning, with other conglomerates implicated in the scandal bracing to face a similar fate.
Shin Se-min, Arirang News.