Prosecutors said Wednesday they have indicted the former chief of the country's top steelmaker POSCO over alleged bribery and breach of trust which cost the company more than a hundred billion won in losses.

Chung Joon-yang is suspected of providing kickbacks to Lee Sang-deuk, the elder brother of former President Lee Myung-bak, to solve one of the company's key problems - a height limitation on its factory buildings, the Seoul Central District Prosecutors' Office said in a press briefing.

In return, Lee made POSCO sign business contracts with a small maintenance company owned by Lee's close acquaintance, according to prosecutors.

Chung is also accused of buying a stake in local plant equipment maker, Sungjin Geotec Co., which was already insolvent at the time of purchase in 2010, causing more than 159 billion won ($137 million) in losses at POSCO.

Chung and the biggest shareholder of Sungjin Geotec, Jeong Jung-do, are known to be friends. 

Prosecutors suspect that Chung also received bribes from Kosteel Co., which buys steel slabs from POSCO, in return for business favors.

For the past eight months, the prosecution has been investigating suspicious deals and alleged slush funds created while Chung headed the firm from 2009 to 2014.

Including Chung and Lee, a total of 32 people -- 17 current and former executives of the global steel giant, 13 from its business partners and a former vice president of a local bank -- have been indicted, prosecutors said. (Yonhap)