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Samsung Chief Indicted Over Tax Evasion

A South Korean special prosecutor investigating alleged corruption at the Samsung Group on Thursday indicted Lee Kun-hee, the group's chief and one of the country's most powerful businessmen, for tax evasion and breach of trust.

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The investigation was launched in January after a former top legal executive at the group accused some of its top management of hiding money and keeping a slush fund of more than $200 million to bribe officials.

The special prosecutor indicted nine other senior Samsung executives, although it said Lee and the others would not be arrested.

Lee could face from five years to life in prison but analysts say he would likely escape prolonged jail time because judges have often been lenient towards corporate leaders convicted of wrongdoing, saying jailing them could hurt South Korea's economy.

"The criminal acts subject to indictment today constituted grave crimes because the amount of tax evaded and profits taken by violation of duties were astronomical figures," the prosecutor said in its findings.

The special prosecutor cleared Samsung of the bribery allegations but said there was a conspiracy at the firm to hide billions of dollars in Lee's assets and top executives also worked to secretly transfer wealth to Lee's children.

A spokesman for the Samsung Group declined to comment.

Samsung Electronics, the world's biggest maker of computer memory chips and flat-screen televisions, is Samsung Group's flagship company.

Samsung
Samsung

The country's family-owned conglomerates known as "chaebol", which powered South Korea from the ashes of the 1950-53 Korean War to become Asia's fourth-largest economy, have been accused for years of having opaque management.

Some of their leaders have been convicted of white-collar crime, but have avoided long jail sentences.

Lee, who was questioned twice this month, said last week he took moral and legal responsibility for the case and would look into reforming management practice at the group.

Samsung said last week the comments did not mean Lee or anyone in the top management would step down. It has repeatedly denied allegations of wrongdoing.

Samsung Electronics delayed the release of its first-quarter earnings to April 25 from the middle of the month because of the probe.