The second son of the head of major family-run conglomerate Hyosung Group has undergone questioning by prosecutors over suspicions of tax evasion and accounting fraud, prosecutors said Wednesday.

The country's 26th-largest business group has been probed by the prosecution on charges of evading a massive amount of taxes, embezzlement through accounting fraud and amassing slush funds overseas.

The Seoul Central District Prosecutors' Office investigating the case called in Cho Hyun-moon, the second son of Chairman Cho Suck-rai, for questioning over the weekend, prosecutors said, without giving further details.

Prosecutors alleged that the firm had evaded corporate taxes worth 1 trillion won ($900 million) for the past 10 years since 1997 by manipulating accounting books.

Chairman Cho is additionally accused of holding shares under borrowed names since the 1990s in an aim to evade transfer and income taxes worth more than 100 billion won, the prosecutors said.

The group also allegedly established shell companies in tax havens in the 1990s with money borrowed from local banks, prosecutors said. The group is also suspected of gaining illegal profit by trading shares in the local stock market with secret funds raised by the offshore paper firms.

Furthermore, the conglomerate's financial unit, Hyosung Capital, is facing new allegations that it extended sizable loans to the Cho family, using borrowed names, prosecutors said.

It is not against the law in South Korea for a financial subsidiary to extend a loan to its major shareholders, but the prosecution office has apparently found some irregularities in Hyosung Capital's loan approval procedure to the owners through its board, they added.

The prosecution office said it will soon summon the elder Cho, who has already been banned from leaving the country pending investigation results, for questioning.

The group, with more than 11 trillion won in assets, has businesses mainly in the fields of energy and heavy industry. (Yonhap News)