South Korean prosecutors indicted the heir to the Samsung empire on Tuesday over a controversial merger of two business units seen as a key step towards his succession, in the latest legal blow to the sprawling conglomerate.

Lee Jae-yong, vice-chairman of Samsung Electronics Co Ltd, committed stock manipulation, breach of trust and other offences when two other subsidiaries, Samsung C&T and Cheil Industries, merged in 2015, the prosecutors said.

Ten other current and former top Samsung executives were also charged.

Lee and his subordinates had carried out “a systemic scheme to take control of the Samsung Group with the least cost”, said the prosecution, by deploying “various unfair transactions” that damaged other shareholders’ interests.

Lee is already separately being retried on charges of bribery, embezzlement and other offences in connection with the corruption scandal that brought down former South Korean president Park Geun-hye.

The businessman was not detained, but the charges are likely to prove a distraction as his firm seeks to navigate the effects of the coronavirus pandemic.

Lee’s legal team rejected the charges, calling them “one-sided allegations”.

“Every process for the merger was carried out legally,” they said, adding the indictment against Lee was “not only beyond comprehension, it’s lamentable”.