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Samsung's chairman Lee named as suspect in $7.5 million tax evasion case

Samsung's chairman Leee Kun-Hee was named by South Korean police on Thursday as a suspect in a $7.5 million tax evasion case

Reuters  |  Seoul 

Lee Kun-hee, samsung
Lee Kun-hee | File photo: Reuters

Electronics' ailing chairman, Lee Kun-hee, was named by police on Thursday as a suspect in an 8.2 billion won ($7.5 million) tax evasion case that involved the use of held by employees.

A series of scandals have dogged the family of Samsung, the country's biggest empire.

The chairman's son Jay Y. Lee, the heir to the 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 Medical Centre and is difficult to communicate with has shown little sign of recovery. Until his imprisonment, had been regarded as the

Police said elder Lee could not be questioned due to his physical condition and declined to comment.

"and a managed funds in 260 under names of 72 executives, suspected of evading taxes worth 8.2 billion won," 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 prompted 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 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 has not been seen back at the office since his release on Feb.5, but members of the Korean community expect him to take up the reins once again and invest more in the 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 plans.

While he spent a year behind bars, Electronics, the world's top maker, earned record profit as it benefited from a "supercycle".

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 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.

First Published: Thu, February 08 2018. 15:15 IST