Prosecutors on Monday raided the offices of DongA One Corp., a leading local flour milling company that belongs to former President Chun Doo-hwan's relative, on suspicion of laundering the secret funds of the military-backed ruler convicted of bribery while in office in the 1980s.

Chun was ordered by the nation's top court in 1997 to return to state coffers some 220 billion won (US$196.8 million) he illegally accumulated through bribery from big businesses during his rule from 1980-88.

Chun, who seized power through a coup, has refused to make the payment, with some 167.2 billion won remaining unpaid.

A team of prosecutors swooped down on the firm's headquarters in Yeouido, western Seoul, the offices and residence of the group's chairman to seize computer hard discs and documents including accounting books, prosecutors said.

The company is owned by Lee Hee-sang, the father-in-law of Chun's third son, Chun Jae-man. The younger Chun allegedly received a bond worth 16 billion won from Lee in 1995 when his father was under a prosecution probe over slush fund allegations, prosecutors said.

"The raid was conducted to corroborate the charges that the secrets funds were illegally transferred from Chun to his children," said a prosecutor investigating the case at the Seoul Central District Prosecutors' Office.

The prosecution office alleged that the portion of the money is the hidden assets of former President Chun and that Lee might have played a role in helping him hide assets.

Since launching a probe team tasked with reclaiming the fortune of the former military dictator, the prosecution office has been zeroing in on not only his immediate family members but also his relatives and in-laws.

Prosecutors suspect that Chun stashed his fortunes in shell companies and bank accounts associated with his family members. (Yonhap News)