Nexson Corp., a local online game developer, said Saturday that it lent money to a former prosecutor to buy its stocks, which helped him amass a huge personal wealth, an indication that the company paid a favor to the former government official.

Nexson's belated confession came as the controversy over a shoddy stock transaction involving former senior prosecutor Jin Kyung-joon is escalating. Nexson, currently listed on the Japanese stock market, had up to that point tightened its lips on details as to how Jin came to buy its stocks.

But according to Nexson, it lent 420 million won to Jin in 2005, and the ex-prosecutor paid back the money in 2006.

The case came to light early this year as Jin, who quit in April of this year, reported a whopping increase in his personal wealth last year. All ranking government officials and lawmakers are required to disclose changes in their personal wealth annually.

Jin sold all his 801,500 shares of Nexon for about 12.6 billion won (US$10.94 million) in 2015, which helped jack up his wealth by 3.8 billion won last year from the previous year.

With just a 400 million won investment, the ex-prosecutor pocketed some 12 billion won in return in just a decade.

Jin has said he bought then-unlisted shares of Nexon in the early 2000s, claiming that the stock purchase was financed with his own money. (Yonhap)