The slush fund scandal which was started after a Samsung in-house lawyer blew the whistle on illegal activities is damaging for the Company who in the past 18 months have seen several executives jailed in the US for price fixing while at home others including the Chairman have been accused of bribery.
Despite the scandal Samsung Group Chairman Lee Kun-hee has failed to step down neither has the board taken action to isolate themselves from exutives under investigation.
According to web site Donga.com, Samsung Group Chairman Lee Kun-hee will face indictment without detention on charges of evading capital gains taxes of more than 150 billion won through borrowed-name accounts to purchase stocks of Samsung affiliates worth three billion U.S. dollars. Samsung Vice Chairman Lee Hak-soo and executive Kim In-joo will also be charged with conspiring with Chairman Lee.
The three men are alleged to have colluded in trying to transfer the group's executive authority to the chairman's son through the issuance of Samsung Everland convertible bonds and Samsung SDS bonds with warrant at below market prices.
Indictment for Lee Kun-hee
Chairman Lee faces indictment without detention for the first time in 13 years. In 1995, he was indicted with eight other conglomerate heads on charges of bribing former President Roh Tae-woo.
If Lee Kun-hee is indicted for tax evasion, he will be the first to be prosecuted for evading capital gain taxes through borrowed name accounts. The verdict will set a new judicial precedent. Thus, a fierce court battle is expected between Chairman Lee and prosecutors.
