Chey Jae-won, SK Group’s senior vice chairman and younger brother of Chairman Chey Tae-won, has been banned from travelling overseas on allegations that he amassed tens of billions of won in illicit slush funds.

The Seoul Central District Prosecutors’ Office, which leads the probe, suspects that the younger Chey raised the funds by falsifying the value of transactions between the group’s subsidiaries and subcontractors. The prosecutors have secured some documents after a raid on the offices of the subcontractors, local reports said.

The prosecutors’ office refused to confirm, citing an ongoing investigation.

Investigators, according to the reports, suspect that the slush funds may have been used to bribe government officials in exchange for business favors.

They also look suspiciously at the 12 billion won ($11 million) which Chey allegedly kept in a personal safe of Kim Jun-hong, CEO of a Kosdaq-listed firm who has been arrested on charges of stock price manipulation.

Kim, a former SK executive, is known as one of the closest aides to Chey.

SK Group said the money may belong to the vice chairman but it has nothing to do with the group.

SK, a family-controlled conglomerate concentrated on energy and telecom businesses, has come under the microscope of public prosecutors after it was recently revealed that it had paid a sizeable amount of money to a former tax official in what they suspect as an act of bribery.

Lee Hee-wan, formerly head of the National Tax Service’s investigative unit, received 50 million won a month between 2006 and last year from the group’s affiliates for his tax accounting services.

The prosecution suspects that the money may be a post-retirement payoff for undue favors Lee gave to SK while he served at NTS, heading tax probes into the group.

By Lee Sun-young (milaya@heraldcorp.com)