An executive of Daewoo Engineering & Construction Co., one of the country's leading builders, has been detained for further questioning on charges of creating huge slush funds while participating in a project to refurbish the country's four major rivers, prosecutors said Wednesday.

The director-level executive, only identified by his surname Ok, was locked up Tuesday night shortly after a Seoul court approved the prosecution's request for an arrest warrant, they said.

Ok is suspected of siphoning off company funds worth billions of won under his name by inflating a subcontractor's construction costs when the firm was contracted for civil engineering services in the mega-budget project in 2009, prosecutors said.

The 22.2 trillion won (US$19.8 billion) project, pushed by the former Lee Myung-bak administration, was completed last year amid mounting criticism over its economic viability and negative environmental impact.

The Seoul Central District Prosecutors' Office said that it has also secured evidence that Ok handed over bribes to government officials in exchange for winning a bid to participate in the project.

Since raiding the offices of nearly 25 local builders in May, including Daewoo E&C, prosecutors have also been investigating allegations that the firms that participated in the rivers project colluded to win bids and committed various irregularities.

The probe into the alleged rigging scheme has been picking up speed as the current Park Geun-hye government has vowed to conduct a thorough investigation into allegations surrounding the river restoration project.

Early in July, state auditors found that construction work on the four-rivers refurbishment project was flawed, resulting in bid rigging and increased costs.

The prosecution office said it will further grill Ok over the exact usage of the secret funds and whether there were other executives involved in the illegal acts. (Yonhap News)