Prosecutors seek 7-yr term for Lee Kun-Hee | business | Hindustan Times
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Prosecutors seek 7-yr term for Lee Kun-Hee

business Updated: Jul 10, 2008 13:44 IST

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A prosecutor on Thursday demanded a seven-year jail term for the former head of South Korea's biggest business group Samsung, who is on trial for tax evasion and breach of trust.

Special prosecutor Cho Joon-Woong also sought a 350 billion won (350 million US) fine for Lee Kun-Hee, who quit the group in April after almost 20 years following a corruption probe.

The Seoul Central District Court will give its verdict next Wednesday on Lee, 66.

"It's all my fault and I would like to apologise to the nation," Lee told the court in his final statement quoted by Yonhap news agency, saying he "feels ashamed" of causing controversy.

Lee has previously accepted blame for lapses at the group, which employs 250,000 people and accounted for more than 20 percent of the nation's exports last year.

But his lawyers have contested specifics of the charges, which followed a three-month probe into corruption allegations made by a whistleblower.

Former US President George H.W. Bush is among a number of foreign VIPs who have petitioned the court seeking leniency if Lee is convicted, said Samsung spokesman Luke Cho.

He said Juan Antonio Samaranch, former International Olympic Committee president, had also sent a petition on behalf of Lee, an IOC member. The appeals cited the contributions of the former Samsung boss to the world economy or international sport.

Cho said Bush senior was not a close friend of Lee but was interested in Samsung because it has a plant in his home state of Texas.

The breach of trust charge relates to the controversial transfer of control over the group from Lee senior to his son Jae-Yong, now 39.

Previous court rulings found that executives arranged for the son to acquire control of Everland, Samsung's de facto holding company, at a below-market price in the mid-1990s through the issue of cheap convertible bonds.

Lee senior is charged with breach of trust by authorising the issuance of the low-priced bonds. He has denied ordering the issue.

Former vice chairman Lee Hak-Soo and other co-defendants have said the bond issue was to bolster Everland's financial health and not to bring about the father-to-son succession.

Lee Kun-Hee is also charged with evading a capital gains tax bill of 112.8 billion won.

He could technically face life in prison if convicted. Most other Korean tycoons brought to court on criminal charges have escaped severe punishment, with judges citing a negative impact on the economy.

Since the departure of Lee senior, executives have announced a major reorganisation.

But acting chairman Lee Soo-Bin lamented this month that the group faces a leadership crisis following Lee's exit and the closure of a unit known as the Strategic Planning Office.