Three of the affiliates are suspected of investing in deals that are irrelevant to their businesses and inflicting at least tens of billions of won in losses.

Hyosung's real estate affiliate is believed to have incurred huge losses from investing in one of the three units. Cho and his son hold the biggest stakes in all of the four affiliates.

Prosecutors said they plan to summon Hyosung officials for questioning once they finish analyzing the seized evidence.

It is not the first time that Hyosung has been under a prosecutorial probe. The former and current chairmen have been investigated for embezzlement, tax evasion and accounting fraud charges in the past decade. Cho has received a suspended term for some of the charges.

The allegations about slush funds were raised after Cho's younger son, Hyun-moon, filed a complaint with the prosecution seeking a probe against his father and older brother over the suspicion.

Cho's three sons, including the youngest Hyun-sang, who is a vice president in the group, have been embroiled in a family feud over the leadership succession. Hyosung's businesses stretch from textiles, chemicals and trading to heavy industries and construction. (Yonhap)