Prosecutors were expected to seek arrest warrants in the coming days for two key suspects in an urban development scandal on charges of promising to give massive bribes to a top official of the project's administrator in exchange for business favors.

Prosecutors have been looking into suspicions over how a previously unheard-of asset management firm, Hwacheon Daeyu, and its seven affiliates reaped astronomical profits from a 2015 project to develop the Daejang-dong district in Seongnam, south of Seoul, into an apartment complex.

Kim Man-bae and Nam Wook, private partners of the project, are alleged to have colluded with Yoo Dong-gyu, former acting president of Seongnam Development Corp., to have the firm take part in the lucrative project. The two are suspected of promising Yoo a total of 70 billion won (US$60 million) in bribes in exchange for business favors.

Prosecutors are expected to seek arrest warrants for them either on Monday or Tuesday, sources said.

Earlier this month, prosecutors had sought an arrest warrant for Kim, but a Seoul court rejected the request, citing insufficient grounds for his arrest. Whether the court accepts or rejects the second request for Kim could be critical in the investigation moving forward.

Yoo, who was arrested earlier this month, was indicted last week for allegedly receiving 350 million won in bribes.

The scandal has received intense media coverage amid questions about its potential impact on next year's presidential election as the project was launched when the ruling Democratic Party's presidential nominee, Gyeonggi Gov. Lee Jae-myung, was mayor of Seongnam.

The main opposition People Power Party has claimed Lee was behind the whole scheme.

Lee, who announced his resignation from his governorship Monday to focus on the presidential election, has apologized for what he described as "appointing the wrong people" but has rejected all allegations raised against him. (Yonhap)