Scandal-plagued Samsung Group vowed Thursday to reform the way it does business after its powerful chairman was indicted on criminal charges.
That’s a familiar refrain from South Korea’s biggest conglomerate, which for decades has helped drive the country’s economic growth while drawing flak for claims of shady practices.
Special prosecutors earlier Thursday indicted Chairman Lee Kun-hee on charges of evading 112.8 billion won (US$114 million; EU71.82 million) in taxes and breach of trust, ending a three-month probe prompted by allegations by a former Samsung lawyer.
But the prosecutors dismissed the most explosive claim — that Samsung used subsidiary companies to raise a slush fund to bribe influential South Koreans — saying there was no evidence.
In carrying out their probe, however, prosecutors discovered what they said were serious irregularities, long alleged by civic groups, that Samsung engaged in dubious financial deals to ensure corporate control passes from Lee to his son.
Besides the top boss, nine other Samsung executives were indicted, including the group’s vice chairman, considered the right-hand man to the 66-year-old Lee.
Samsung issued a statement after the indictments, apologizing “for causing concerns” and adding it was “preparing reform plans” that it would announce next week.
“The central question is whether they are going to turn this case into an opportunity to reform their corporate governance,” said Kim Joongi, a professor of law at Seoul’s Yonsei University.
Kim, who noted Samsung has made similar promises in the past, has been active in pushing for better management practices at Samsung and other conglomerates.
Those industrial groups, known as “chaebol,” have long been accused of influence-peddling as well as dubious transactions between subsidiaries to help controlling families evade taxes and transfer wealth to heirs.
Civic groups critical of Samsung complained that independent counsel Cho Joon-woong failed to indict Lee for the alleged bribery and levied the other charges without arresting…