Disgraced comedian-turned-director Shim Hyung-rae has been banned from leaving the country in connection with suspicions that he embezzled huge company funds, police said Monday.

Police have recently launched an internal probe into suspicions that Shim, chairman of the movie production company Younggu Art, misappropriated 4.1 billion won (US$3.7 million) of company funds for private purposes, for three years from 2008.

Police were also looking into allegations that he threatened investors who were demanding a refund for their investment in one of his movies by firing an illegally remodeled gas spray gun before them, in October 2009.

Another focus of the police probe was whether any senior officials received bribes or lavish treats from Shim in return for helping him get 4.2 billion won from government coffers for the production of his latest film, "The Last Godfather," between 2008 and 2009, the police said.

Once called a great master of slapstick comedy with his trademark persona, a fool named "Young-gu," the 53-year-old entertainer had made commercial successes as a director of his first sci-fi monster picture, "Yonggari (1998)," and his second monster picture, the CGI-heavy "D-War (2007)."

But Shim and his company allegedly fell quickly into a trap of debts following the failure of his latest Hollywood-targeted film, "The Last Godfather (2010)."

Police plan to decide whether to book him based on the result of the probe.

Last week, former employees sued the company, demanding it pay 890 million won in unpaid wages and retirement allowances. (Yonhap News)