SEOUL (Reuters) - South Korean prosecutors indicted a blogger on Thursday who had warned of financial doom for the country with critics saying he was targeted because his gloomy forecasts upset the government battling an economic downturn.

A South Korean surfs the Web at an Internet cafe in Seoul in this February 25, 2006 file photo. REUTERS/You Sung-Ho

The blogger, writing under the pseudonym Minerva, became a household name for his predictions of sharp falls in the won and the local stock market and the collapse of U.S. investment bank Lehman Brothers. Prosecutors said he hurt the local currency by posting incorrect information online.

“The suspect in this case was indicted on charges of false information on two occasions,” an official at the prosecutors’ office said by telephone.

As South Korean markets tumbled late last year amid the global downturn, the main financial regulator warned it would crack down on what it considered malicious rumors and some economic analysts say they have come under pressure from authorities not to voice negative views on the economy.

“The prosecution hurriedly went ahead with its investigation and a court readily gave prosecutors a permit to conduct a witch hunt,” the liberal Hankyoreh daily said in a recent editorial, calling the case an infringement of freedom of speech.

Prosecutors identified the blogger as Park Dae-sung, an unemployed 30-year-old man who faces up to five years in prison if he is found guilty of violating communications laws.

Since his detention earlier this month, legal experts have questioned whether authorities had legal grounds to prosecute individuals. Meanwhile the conservative ruling party of President Lee Myung-bak is pushing for a tough new law on cyber slander.

“The Minerva case shows that the tradition of rule of law has yet to set root firmly in our society,” said Dankook University law professor Ji Seong-woo.

Since Park’s detention, reports have flooded local mainstream media saying he was a quiet man with a humble educational background. Experts said this may be an attempt to discredit Park in a society that places high value on an elite education and employment at prestigious firms such as brokerages.

“Should Park be punished, it should be for his conduct and not because he is some thirty-some year old unemployed two-year technical college graduate,” Ji said.

The South Korean currency fell 28 percent last year and the main share index slumped 40 percent.

President Lee reshuffled his top economic officials on Monday, replacing his widely criticized finance minister, to speed up measures to stop Asia’s fourth largest economy from sliding into its deepest recession in 11 years.