Investigators raided Hana Capital headquarters in southern Seoul on Wednesday over allegations of a suspicious deal with the troubled Mirae Savings Bank, news reports said.

The search of the financial firm, one of affiliates of Hana Financial Group, came after Mirae Savings Bank chairman Kim Chan-kyung’s testimony to the prosecution that former Hana group chairman Kim Seung-yu was involved in a paid-in capital increase of the savings bank last September, the reports said.

Kim Chan-kyung was arrested early this month on charges of breach of trust and misappropriation of funds while attempting to flee to China.

According to Kim’s testimony, then-Hana chairman Kim instructed Hana Capital to participate in the capital increase of the money-losing savings bank at the request of Sejoong Namo Tour chairman Chun Shin-il, a former close confidant to President Lee Myung-bak.

Prosecutors investigating corruption in savings banks plan to look into the background of Hana Capital’s participation, sources said.

The prosecution may summon Hana chairman Kim for questioning about the suspicious deal, the sources said.

But Kim reportedly denied any wrongdoing, saying it was an legitimate investment in the savings bank.

Hana Capital invested 14.5 billion won ($12.3 million) in Mirae Savings Bank in September.

By Park Min-young  (claire@heraldcorp.com)