Prosecutors on Thursday formally arrested the head of a foreign-affiliated advertising company in Seoul, which had a major contract with the nation's largest tobacco and ginseng product manufacturer, over allegations he created slush funds.
The Seoul Central District Court issued a warrant to arrest the suspect, surnamed Kim, noting there are considerable reasons to believe he committed the crimes and could possibly destroy evidence.
Kim -- who heads the advertising agency, only identified by its initial J -- is accused of creating slush funds worth over 1 billion won (826,000 dollars) by exaggerating the unit price in contracts with its partners.
Prosecutors suspect the money was used to bribe its clients, including KT&G Corp.
A former head of the company and a staff member in the cigarette and ginseng maker's marketing department were also formally arrested over their alleged involvement in the process. (Yonhap)