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Samsung Electronics' ailing chairman, Lee Kun-hee, was named by South Korean police on Thursday as a suspect in an 8.2 billion won ($7.5 million) tax evasion case that involved the use of bank accounts held by employees.
A series of scandals have dogged the family of Samsung, the country's biggest business empire.
The chairman's son Jay Y. Lee, the heir to the Samsung Group, was released from detention earlier this week after an appeals court halved his sentence for bribery and corruption to 2-1/2 years and suspended it for four years.
Following a heart attack in 2014, the elder Lee, 76, has remained hospitalized in Seoul's Samsung Medical Centre and is difficult to communicate with has shown little sign of recovery. Until his imprisonment, Jay Y. Lee had been regarded as the de facto head of the group.
Police said elder Lee could not be questioned due to his physical condition and Samsung declined to comment.
"Samsung chairman Lee Kun-hee and a Samsung executive managed funds in 260 bank accounts under names of 72 executives, suspected of evading taxes worth 8.2 billion won," Korean National Police Agency said in a statement, planning to send the case to prosecutors.
Police added that the accounts, holding some 400 billion won, were found in the course of their probe into alleged improper payments for the renovation of Lee's family residence.
The investigation into tax evasion harks back to the late payment of 130 billion won in tax in 2011, though only 8.2 billion of that sum falls within the statute of limitations, according to police.
The graft case that led to the younger Lee's arrest last year and brought down the former president Park Geun-Hye prompted Samsung to vow to improve transparency in corporate governance and grant heads of the group's affiliates more autonomy from the Lee family.
The group dismantled its corporate strategy office in late 2017.
The new liberal government led by President Moon Jae-in elected after the corruption scandal promised to put family-run conglomerates under stronger scrutiny and end the practice of pardoning corporate tycoons convicted of white-collar crimes.
Though Jay Y. Lee has not been seen back at the office since his release on Feb.5, but members of the Korean business community expect him to take up the reins once again and invest more in the business to create jobs that might help soothe public anger.
Returning home from prison, the younger Lee apologised for not showing his best side and said he would do his best but did not give specifics on his business plans.
It is not the first time the elder Lee has been investigated for tax evasion. He was convicted in 2009 and later pardoned for tax evasion after being embroiled in a scandal that also involved the use of accounts held by trusted employees.
Police say they have since identified more such accounts.
Shares in Samsung Electronics rose 1.1 percent compared to a 0.5 percent rise in the wider market. Blue-chip tech stocks bounced after recent falls as investors saw current valuations as attractive, analysts said.