You Young-koo, head of the Korea Baseball Organization, was arrested on Wednesday for misappropriating funds from his school foundation in 2006.

He has offered to resign from the governing post of the Korean professional baseball league, officials said.

Officers at the Seoul Central District Prosecutors’ Office said You had made a payment guarantee for a 150 billion won ($138 m) loan to Myongji Construction in 2006 while he served as Myongji School head. The company failed to repay the debt, causing the school to bear the burden of all the loans, the prosecutors said. You is also suspected of having embezzled billions of won in the process of granting his school’s construction projects to Myongji construction in 2007.

Investigators are also examining whether You created a 4.7 billion won-slush fund to lobby government officials.

The probe began when the Ministry of Education, Science and Technology’s audit results revealed You’s irregularities.

KBO said You had offered to resign on Monday, when the investigation was close to an end.

You is the second chief of KBO to have been elected. Other KBO heads were appointed by the government.

By Bae Ji-sook (baejisook@heraldcorp.com)