Prosecutors seek seven-year term for former Samsung boss

SEOUL (AFP) - 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 is expected to give its verdict next week on Lee, 66, who denies the charges.

Lee has accepted blame for any 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 are contesting the charges, which followed a three-month probe into corruption allegations made by a whistleblower.

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 aimed at bolstering Everland's financial health instead of bringing about the father-to-son succession.

Lee Kun-Hee is also charged with evading a capital gains tax bill of 112.8 billion won (110 million dollars).

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.