S Korea raids KEB over sale worry

The sale of KEB to Lone Star prompted staff protests at the bank

South Korean prosecutors have raided the offices of Korea Exchange Bank (KEB) as part of a probe dating back to its 2003 sale to a US investment fund.

The probe is looking into allegations that KEB figures were manipulated so it could be sold quickly and cheaply.

Lone Star Funds bought KEB for 1.4 trillion won (£802m; $1.2bn) in 2003, and is currently in the process of selling it on for 6.95 trillion won.

Lone Star, a top buyout fund in South Korea, has denied any wrongdoing.

Closer scrutiny

Prosecutors said that the raid was carried out by 30 officials "in order to secure information concerning the sale of KEB".

Documents were seized, they added.

South Korean authorities have recently stepped up their anti-corruption activities and have been going after business leaders at some of the country's largest companies.

Chung Mong-koo, the group chairman of vehicle-maker Hyundai Motor, is being tried for embezzling 103.4bn won.

Mr Chung - who denies the charges - has also has been accused of creating slush funds to pay politicians and officials for business favours.