The state audit agency said Friday it has filed a complaint with the prosecution against a former chief of the state-run oil company for incurring a huge loss from a shady takeover deal he led while in office.

The move came after the Board of Audit and Inspection of Korea found that the Korea National Oil Corp. (KNOC) suffered a loss of around US$279 million in the firm's shady acquisition of the Canadian refining firm, North Atlantic Refining Limited (NARL), in 2009. 

The loss was incurred after KNOC acquired NARL for the inflated price of $1.22 billion in 2009 although the due price was only around $941 million, according to the audit agency. 

Kang Young-won, the then president of the state firm, hastily made the acquisition decision in order to boost its annual oil production performance, the audit agency said.

The state auditor said that Kang was well aware of the prospect of a loss, but went ahead with the acquisition to attain yearly performance goals, adding that it has referred Kang to the prosecution on negligence charges. It is also urging the trade ministry to pursue a damages suit against the former president.

"(KNOC) recklessly acquired the unhealthy refining firm without a sufficient review only to make up for its stagnant M&A performance," the audit agency said in a statement. 

Amid mounting losses, KNOC sold NARL to a New York-based merchant bank for just $3.5 million last year, citing unfavorable global refining market conditions as well as the prospect of further losses.

The latest finding by the audit agency is expected to fuel the opposition political parties' call for a parliamentary probe into former President Lee Myung-bak over his so-called energy diplomacy policy.

Opposition parties and civic groups have claimed that massive amounts of state funds were wasted on overseas natural resources development projects pursued under the former Lee administration. (Yonhap)