hankyoreh

A special prosecutor cleared the son of Samsung Group Chairman Lee Kun-hee and dozens of senior Samsung executives Thursday of allegations that they illegally covered up a huge loss from a failed Internet venture led by the heir.

"We decided not to indict them on the grounds that there was not enough evidence to prove the allegations," special prosecutor Cho Joon-woong told reporters.

The decision was the first by the special prosecutor authorized to verify a slew of corruption allegations against the family-controlled conglomerate.

A civic organization filed a complaint against the chairman's son and heir, Jae-yong, and 27 Samsung executives, in 2005, accusing them of breach of trust over a failed Internet business.

Tapping into an Internet venture boom, the junior Lee launched 14 Internet firms in 2000 under the care of the Samsung Strategic Planning Office that plays a key role in the group management.

Senior executives of Samsung affiliates moved to the new firms to help them take root.

But over the following year, the boom fizzled and Lee's firms faltered. Then, nine affiliates of Samsung Group, including Cheil Communications Inc. and Samsung SDI, bought shares of the ailing firms, allegedly covering 20 billion won worth of losses the junior Lee had caused.

Samsung claimed that the purchases were a business investment, but a civic organization, the People's Solidarity for Participatory Democracy, claimed that they aimed to cover the fall of Lee's management prowess as well as his financial losses.

The special prosecutor said he wanted to give time to the civic organization to appeal by making the decision before the seven-year statue of limitations for the charges expires on March 27.

The non-indictment decision gave temporary relief to Samsung Group, as one official, requesting anonymity, said, "It's good that misunderstandings were cleared."

The probe was part of a broader investigation centered on Samsung's alleged corrupt behavior: the creation of a slush fund; the bribery of government officials, judges and prosecutors; and an illegal transfer of control of the group from the chairman to his son.
SEOUL, March 13 (Yonhap)