Prosecutors said Monday they were seeking an arrest warrant for a cousin of President Lee Myung-bak's wife on suspicion that he received bribes from a troubled savings bank in return for using his influence.

Kim Jae-hong, the head of a welfare foundation under state-run tobacco distributor KT&G Corp., is alleged to have pocketed 400 million won (US$348,900) from Ryu Dong-chun, the chairman of Jeil Savings Bank facing closure.

Kim, an elder cousin of first lady Kim Yoon-ok, was allegedly asked to lobby for the troubled bank's survival in exchange for the money.

Despite the suspected lobbying efforts, the bank had its business suspended by the financial regulator in September, along with many other peers, due to its capital shortage mostly stemming from reckless, illegal business investments.

The special investigation team probing irregularities behind a number of suspended savings banks said it is looking into whether the bribe effectively led Kim to lobby for Ryu's savings bank.

In a recent interrogation by the investigation team composed of prosecutors, financial and tax authorities, the cousin denied the alleged bribe taking, according to officials at the team.

The 71-year-old Ryu was arrested and indicted last October on charges of leading massive illegal lending at the bank and embezzling nearly 10 billion won in company funds.

The scandal is another blow to President Lee who enters the final year of his five-year presidential term in 2012. An aide to Lee's elder brother, Rep. Lee Sang-deuk of the ruling Grand National Party, is also facing suspicion of bribe taking.

(Yonhap News)