Chief of int'l ad company in Seoul arrested over alleged embezzlement

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)