Prosecutors raided the headquarters of an auto parts supplier Thursday as part of a probe into suspicions that the company managed a slush fund for former President Lee Myung-bak.

Investigators from the Seoul Eastern District Prosecutors’ Office searched the premises of DAS headquarters in Gyeongju, North Gyeongsang Province, as well as the offices and residences of related people, the prosecution said.

The management of DAS allegedly embezzled the firm’s funds to amass a slush fund of 12 billion won ($11.2 million), and evaded taxes. Lee Sang-eun, former President Lee’s eldest brother, and Kim Jae-jung, the former president’s brother-in-law, are the company’s largest shareholders, but critics have suspected Lee Myung-bak to be the real owner of the company.

An independent counsel investigated the allegations in early 2008, and declared Lee innocent days before he was sworn in as president. Special counsel Chung Ho-young, who investigated Lee over the BBK investment fraud scandal, had concluded that an accounting clerk at DAS embezzled 12 billion won. DAS was the biggest investor in BBK, an offshore investment fund that lost its operating license in 2001 for forging investment reports.

The prosecution reopened the case late last month after a civic group and a lawyers’ association filed a complaint against the “unknown real owner” of DAS, and Chung. They accused the former of embezzlement and tax evasion, and the latter of failing to do his job.

Prosecutors said Thursday’s search was aimed at revealing the nature of the 12 billion won.

By Kim So-hyun (sophie@heraldcorp.com)