PROBE INTO SCANDAL-SCARRED SAMSUNG SEEN AS TEST FOR S KOREA.

SEOUL, Dec 3 Asia Pulse - The last time Lee Kun-hee, the chairman of Samsung Group and South Korea's richest man, faced a crisis was in 2005. At issue then was a graft scandal unearthed by a TV journalist accusing Samsung of giving illegal political funds to some presidential candidates in 1997.

As prosecutors launched a probe into the allegations, Lee flew to the U.S and returned home five months later, only after prosecutors, citing a lack of evidence, decided not to indict him. Two Samsung executives were held responsible and received suspended jail sentences.

But now Lee is facing a much more serious situation as his group is engulfed in allegations of bribery, accounting fraud, the use of slush funds that may have affected the 2002 presidential election, and shady stock transactions meant to pass control of the group to Lee's only son.

In an unusually swift move, prosecutors last week launched a probe into the allegations and barred nine Samsung executives, including Lee, from leaving the country. An independent counsel backed with bipartisan support was authorized on Wednesday by President Roh Moo-hyun.

The allegations this time are ominous, because they come from a former chief legal attorney for Samsung.

Kim Yong-chul, a former prosecutor who worked at Samsung from 1997 to 2004, described Samsung and the Lee family as a "force mixed with injustice," saying he decided to blow the whistle to gain a public support for a "fair and thorough" investigation.

Analysts say that the case is a litmus test of whether South Korea's relatively youthful democracy and judicial system are ready to crack down on the white-collar crimes of family-owned conglomerates, called chaebol in Korean. Chaebol grew rapidly as they kept cozy relations with past military governments.