S Korea slush probe widens

President Roh has vetoed an independent investigation

South Korean prosecutors have raided an affiliate of the country's biggest car maker, Hyundai Motor.

They seized documents from the office of Hyundai Capital, a financing arm of the company.

Prosecutors have been investigating several South Korean conglomerates over allegations that they provided illegal funding to politicians in last year's election.

POLITICAL FUNDING ROW 29/9 - Roh quits ruling party due to factional divides 13/10 - Roh proposes referendum on his rule 16/10 - Former Roh aide held on slush fund allegations 21/10 - GNP MP confesses to taking slush money 28/10 - State prosecutors begin inquiry 10/11 - National Assembly votes for independent inquiry 18/11 - LG offices raided as scandal widens 24/11 - Samsung subsidiary offices raided 25/11 - Roh vetoes independent inquiry 27/11 - Hyundai affiliate offices raided

"Prosecutors began searching through our offices from 11 o'clock (0200 GMT) this morning, but we are not aware of the reason," a Hyundai Capital spokesman told the Reuters news agency.

The funding scandal came to light in October, after allegations that executives at another conglomerate, SK group, had provided illicit contributions to a political aide of President Roh Moo-hyun.

A number of investigations are underway into other companies, including the Samsung Group and LG Group.

Referendum

The scandal has contributed to Mr Roh's decision to propose a referendum on his rule.

But critics have questioned whether South Korea's constitutional allows such a vote.

On Thursday, the country's Constitutional Court rejected a legal challenge to the proposed referendum. The former National Assembly Speaker, Lee Man-sup, and several civic groups, had asked for a ruling on the legality of the call.

The court rejected their suit, but failed to clear up the issue, because it said President Roh's proposal for a referendum was not detailed enough.

Pressure has been growing on Mr Roh in recent days over the government's handling of the alleged funding scandal.

On Wednesday, Choe Byung-yul, chairman of the Grand National Party (GNP), began fasting after President Roh vetoed parliament's decision to appoint an independent prosecutor to investigate election financing.

The GNP has already announced it is boycotting parliament and is considering launching an impeachment against Mr Roh.

The president said he wanted state prosecutors, who are currently investigating the claim, to finish their work first.