Prosecutors on Friday indicted the founder of cash-strapped budget carrier Eastar Jet for embezzlement and breach of trust.

Lee Sang-jik, an independent lawmaker, faces several charges including causing about 43.9 billion won (US$38.8 million) in losses to the airline by underselling company shares to a subsidiary owned by his children in 2015.

He is also suspected of embezzling about 5.3 billion won from its affiliates.

Lee was arrested late last month, after the National Assembly passed a motion to lift his immunity from arrest. He became the second sitting lawmaker to be put behind bars in the current legislature.

Formerly affiliated with the Democratic Party, Lee left the ruling party last September amid controversy over unpaid wages, mass layoffs and corruption allegations surrounding his family.

The prosecution began an investigation into Lee in July after the main opposition People Power Party and the labor union of Eastar Jet filed complaints against him. (Yonhap)