Prosecutors on Wednesday summoned Kim Jung-ju, founder of the nation’s largest game company Nexon, on suspicions that he gave insider information to a senior prosecutor who raked in hefty stock gains.

The prosecutors said they are investigating whether Kim gave information about the stock market debut of Nexon Japan in advance to Jin Kyung-joon, a prosecutor who is one of Kim’s college friends.

In 2005, Jin bought 10,000 Nexon shares at 425 million won ($370,000) and sold them last year at 12.6 billion won to pocket more than 12 billion won. The prosecution believes that he was able to enjoy handsome gains, as the value of Nexon Japan stocks skyrocketed by more than 100-fold when it was listed in Japan in 2011.

Jin claimed that he bought the stocks with his own money when the government was checking on the irregularities of public officials’ asset value in March. A month later, however, he retracted his words that some of the money had come from his mother-in-law as he was called in to the Government Public Ethic Committee for his suspicious gains from selling Nexon’s shares.

The ethics committee later found out that the source of money came from Nexon, not the prosecutor’s mother-in-law.

On Tuesday, the prosecutors raided offices of Nexon in Pangyo and Jejudo Island alongside the residences of Jin and Kim. The chairman has been placed under a travel ban.

Earlier, Kim was accused by a nonprofit watchdog Specwatch on charges of embezzlement and dereliction of duty. The watchdog claimed that the chief caused a loss of 2.8 trillion won to the game company by selling Nexon Korea to Nexon Japan.

By Shin Ji-hye (shinjh@heraldcorp.com)