Samsung Heir Charged with Fraud Over Controversial Succession Deal

"Every process for the merger was carried out legally," they said, adding the indictment against Lee was "not only beyond comprehension, it's lamentable".

Cloud of uncertainty

Chaebol families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.

Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&T to give him a bigger stake in the merged entity — a key part of the Samsung structure — consolidating his grip on the conglomerate.

Lee's latest legal troubles add a layer of "uncertainty" to the company and could "burden the South's economy as a whole", said Kim Dae-jong, a business professor at Sejong University in Seoul.

"The fact that he will have to stand another trial creates a cloud of uncertainty and probably affects Samsung's long-term investment plans," he told AFP.

With the country feeling the economic pain from the outbreak, "the timing isn't good", he added.

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Nonetheless, Samsung Electronics' shares closed up 0.37 percent in Seoul.

Some chaebol leaders who have been convicted in the past have subsequently received presidential pardons in recognition of their economic roles.

South Korean President Moon Jae-in campaigned in part on a promise of reforming the chaebols and the prosecution's move came despite a civilian review panel recommending Lee should not be indicted, citing a lack of evidence.

Lee was jailed for five years in 2017 after being found guilty of bribery and other offenses linked to former president Park, before being cleared of the most serious charges on appeal and released a year later. That case is currently being retried.

The Samsung heir apologized in May over the issues, pledging to ensure "there will be no more controversy over the succession" and that he would not allow his children to take over from him at the firm.

"Our technology and products are being hailed as first-class but the public gaze towards Samsung still remains harsh," he said, bowing to the cameras. "This is my fault. I apologize." 

(Writers & Editors: KJK/SLB/DAN, Agence France-Presse)

Source: http://u.afp.com/3Lab