For Choi Hae-pyung, head of an electronics parts maker, running his business over the last year has been like steering a boat through a double storm: competition from China and the rising value of the Korean currency have squeezed his already thin profit.
But those challenges were anticipated. What Mr. Choi did not foresee was a scandal.
For weeks, the manufacturing giant Samsung, which relies on thousands of parts suppliers, like Mr. Choi’s Green C& C Tech here, has been battered by accusations of corruption. Executives were banned from leaving the country. Prosecutors raided Samsung’s offices in search of traces of a suspected slush fund that was said to exceed $217 million.
“Everyone is watching what’s going to happen to Samsung,” Mr. Choi said. “If Samsung takes a punch, we feel the shock, too. If Samsung shrinks because of the investigation and cuts its investment, smaller companies like us will shut down in droves.”
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