The chairman of Samsung will be prosecuted for allegedly hiding millions of dollars to avoid paying taxes, South Korean authorities have announced.

Lee Kun-hee and nine other senior executives were formally accused yesterday of concealing the cash in employee stock accounts, according to The New York Times.

Special prosecutor Cho Joon-woong told a news conference: "Samsung has led the advancing and globalising of South Korean businesses, but it's also true that it has structural problems."

Some of Lee's charges also stem from an alleged scheme to hand control of the Samsung empire to his son using illegal stock trades via subsidiaries.

A statement from the firm said: "Samsung would like to apologise for causing concerns. Taking this special prosecution investigation as a new starting point, Samsung is preparing reform plans, based on advice from various sectors of our society."

The whistle was blown by Samsung's former chief counsel Kim Yong-chul. He claims that the firm ran a vast bribery network, delivering gifts to prosecutors, officials, and politicians. Cho said there was not enough evidence to pursue bribery charges, however.

The executives were not arrested because authorities fear destabilising Samsung's management. According to AFP, prosecutors decided not to jail the group "in consideration of a negative impact on our economy". ®

10 comments posted — Comment period finished