The prosecution on Thursday arrested a former executive of Lotte Chemical Co., an affiliate of South Korea's retail giant Lotte Group, on charges of being involved in an alleged tax evasion scheme.

It was the first arrest of a former Lotte official since prosecutors launched the first round of raids on a series of the group's affiliates on June 10 as part of their probe into the country's fifth-largest conglomerate and its alleged slush funds.

The prosecution claims that the suspect, identified only by his surname Kim, was allegedly involved in the process of Lotte Chemical's tax evasion worth tens of billions of won.

Kim is also suspected of having destroyed some of the evidence related to the chemical firm's alleged creation of slush funds.

With Kim's arrest, the high-profile probe into the retail giant is expected to pick up the pace, observers said. The prosecution suspects that Lotte Chemical is at the center of the group's scheme to amass slush funds. (Yonhap)