Korean financial authorities have launched an investigation into an overseas affiliate of SK Group and property deals linked to a woman who was recently found to be in a relationship with the group’s chairman over alleged violations of the foreign exchange law, sources said Wednesday.

The Financial Supervisory Service summoned the woman, a U.S. citizen identified by her surname Kim, and officials at Singapore-based consulting firm Bergaya International to question whether they breached the forex transaction act while conducting a real estate transaction in 2010.

The 41-year-old Kim bought a luxury apartment in Banpo, southern Seoul, built by the group’s construction arm SK E&C, for 1.55 billion won ($1.28 million) in 2008 and then sold it to Bergaya International for 2.4 billion won in 2010.

The apartment came under the spotlight after SK Group chairman Chey Tae-won said that he was in an extramarital affair for several years with Kim and had a child out of wedlock in late December.

Some media outlets have speculated that Chey might have embezzled his company’s money to buy the house for Kim by using the overseas affiliate.

During the transaction, both sides failed to report the purchase to the country’s central bank.

Under law, non-residents including Koreans who live abroad and companies operating overseas are obliged to inform the Bank of Korea when they acquire real estate in Korea. It is designed to prevent people and companies from not paying their dues or trying to hide their wealth abroad.

“Necessary measures will be taken once any law violation or tax fraud charges are confirmed,” an FSS official said.

Those who break the rule are subject to penalties up to 100 million won or up to one-year imprisonment.

By Park Han-na (hnpark@heraldcorp.com)