Image: Lee Kun-hee, former Samsung Group chairman
Lee Jae-won  /  Reuters
Lee Kun-hee, center, the former Samsung Group chairman, leaves after his trial at a Seoul court on Wednesday.
updated 7/16/2008 2:08:48 AM ET 2008-07-16T06:08:48

A South Korean court convicted former Samsung Chairman Lee Kun-hee on Wednesday for evading taxes and fined him $109 million, but said his crimes did not justify a prison term.

Prosecutors had demanded a seven-year sentence and $347 million in fines against Lee for tax evasion and other charges.

"His crime is not serious enough to sentence him to prison," Judge Min Byung-hun of the Seoul Central District Court said in announcing his decision.

While convicting Lee for tax evasion and securities law violations, the court acquitted Lee on charges of breach of trust that had stemmed from allegations of dubious financial transactions to transfer corporate control to his son.

The 66-year-old tycoon has personified Samsung Group, the nation's largest conglomerate, which he had led for two decades as it grew into a global brand. He quit as Samsung head earlier this year following his indictment.

"I'm sorry for causing trouble to the people," Lee said after the verdict, appearing relieved.

The probe against Lee and Samsung was prompted by allegations by a former company lawyer that Samsung created a large slush fund to bribe prosecutors, officials and other influential figures. In April, special prosecutors indicted Lee after a three-month probe into his family-run company.

Prosecutors have said they found $4.5 billion of his personal assets under borrowed names and determined he evaded taxes worth $112 million. Lee was also charged with failing to report to securities authorities changes in the ownership of his stock assets.

The Samsung conglomerate, founded by Lee's father, consists of dozens of companies and has interests in businesses including electronics, shipbuilding, construction and life insurance. The group accounts for up to 20 percent of South Korea's exports by some estimates.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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