Samsung chief to step down; sorry for tax scandal

By Jon Herskovitz

SEOUL (Reuters) - South Korea's most powerful businessman on Tuesday announced he would step down as head of the giant Samsung Group following his indictment last week for tax evasion and breach of trust.

In a shock announcement, Lee Kun-hee, 66, also apologized for the scandal which led to the indictments of nine other senior executives. But analysts pointed out his family will still control the country's largest conglomerate.

"I will step down from the Samsung chairman position today. I am saddened as there is still much to do and a way to go, but I will leave with all the faults of the past," an expressionless Lee said in a brief statement broadcast on national television.

The group will dismantle its powerful strategic planning office, which critics say is an opaque organization able to wield influence across some 60 affiliates, including flagship company Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), a world leader in computer memory chips and flat display screens.

"I don't see anything more than a change of people in charge, there's no change at all in the fact that (the Lee family) will remain the owner," said Oh Suk-tae, an economist at Citibank.

Lee's son, Lee Jae-yong, considered as being groomed for the top slot at the group, is stepping down from his executive post within South Korea and will go abroad to serve in another role.

Shares in group affiliates such as Samsung Securities Co Ltd (016360.KS: Quote, Profile, Research, Stock Buzz) and Samsung Construction & Trading (000830.KS: Quote, Profile, Research, Stock Buzz) fell by as much as 4 percent on the news, that stunned markets and a public fascinated by the reclusive Lee, one of South Korea's richest men and most revered business leaders.

Listed Samsung group SAGR.UL firms account for 20 percent of the total market capitalization on the main board of the South Korean bourse , according to its data.