Prosecutors sought an arrest warrant Tuesday for the owner of an asset management firm at the center of a snowballing regional development corruption scandal over allegations his firm received massive business favors in exchange for bribes.

Kim Man-bae, a former journalist, is facing a series of allegations in connection with how his previously little-known firm, Hwacheon Daeyu, was selected as a civilian partner for the 2015 development project in the city of Seongnam, south of Seoul, and reaped astronomical profits.

He is suspected of colluding with Yoo Dong-gyu, acting president of the Seongnam Development Corp. in charge of the city-run project, to get his firm to take part in the lucrative project to develop Seongnam's Daejang-dong district into apartment complexes.

Kim allegedly gave Yoo 500 million won ($418,769) as part of a deal to pay him a total of 70 billion won.

Yoo has already been arrested on charges of breach of trust and bribe-taking.

Kim's legal counsel expressed strong regret over the prosecutors' arrest warrant request, questioning the authenticity of a voice recording prosecutors have reportedly presented as key evidence.

His lawyer claimed it infringes upon Kim's defense rights, as the probe proceeded without showing them the transcript or letting them hear the recording despite their strong objection.

The arrest warrant request came a day after Kim was questioned by prosecutors. The Seoul Central District Court is set to hold a hearing Thursday to determine whether to issue the arrest warrant against Kim.

The scandal has been the hottest issue in South Korea amid opposition accusations Gyeonggi Province Gov. Lee Jae-myung, who won the ruling Democratic Party's presidential nomination Sunday, was responsible, as he was mayor of Seongnam at the time.

(Yonhap)