Prosecutors said Thursday they have indicted SK Group Chairman Chey Tae-won on charges of embezzlement, but he will be allowed to stand trial without physical detention.

The indictment came about a week after they arrested the group's vice chairman, Chey's younger brother Jae-won, over the same charges. The brothers allegedly colluded to embezzle a massive amount of group funds to cover stock futures investment losses incurred by the chairman.

The 52-year-old chairman and his younger brother are suspected of funneling funds from SK Group affiliates to the investment firm Benex Investment, headed by Kim Jung-hong, a former executive at the telecommunications unit. Kim was also indicted for embezzlement.

The money was then used for the chairman's personal investments in stock futures and options. A series of unsuccessful stock market bets led them to embezzle nearly 1 billion won ($86.8 million) from other SK affiliates to cover the massive losses, according to prosecutors.

The embezzlement charges also include illegally using another 75 billion won of SK Group funds as collateral to take out personal loans and the misappropriation of 13.9 billion won mislabeled in accounting books as costs to pay executive bonuses, the prosecutors also noted. 

(Yonhap News)