SEOUL — Soo Park, the CEO and founder of Korean PR firm News Communications, has been arrested amid suspicion that the agency was involved in Daewoo Shipbuilding and Marine Engineering's (DSME) corruption and accounting fraud scandal.

Park's arrest comes after she was questioned by prosecutors last week, following a raid on News Communications offices in Seoul. Prosecutors are understood to be focusing on a contract worth around US$1.8m, signed between DSME and News Communications in 2008.

Park is suspected of illegally lobbying for Nam Sang-tae to pursue a second term as the CEO of DSME, using her corporate and government connections. Park is reported to have denied accusations of lobbying and is said to have described the DSME contract as "payment for earnest work."

According to media reports in Korea, the Seoul Central District Court issued an arrest warrant for Park, citing concerns that she might flee or destroy evidence.

Nam has already been indicted on charges of accounting fraud and embezzlement, including allegations that he lobbied politicians and government officials to extend his term. Newscom CEO Park is closely connected to Min Yoo-sung, former chairman of the Korea Development Bank, which is DSME's main creditor and largest stakeholder.

In a press conference on Friday, furthermore, a ruling party lawmaker claimed that Park accompanied the chief editorial writer of a prominent Korean media outlet on a luxury jet chartered by DSME.

"Recently, various rumors have been raised on the possible collusion of [NewsCom CEO] Park Soo-hwan with the prominent journalist, and there is significance that one of them has been confirmed as truth," Saenuri Party reporesentative Kim Jin-tae is reported to have said. "After researching the said chartered jet, [we found that] it is a 10-passenger plane that Hollywood stars usually use, one that regular people would never dream of seeing in a lifetime."

The trip — led by former CEO Nam — took place in 2011, added Kim, while DSME was undergoing a debt restructuring programme. "I am curious as to who shouldered the expenses and why Naples and Santorini, which were not part of the business trip, were included."

Park's legal woes have triggered heightened scrutiny of the Korean public relations industry, in a country where government lobbying is illegal. NewsCom is often viewed as a unique player in the market, thanks to its close government links, which have helped it build a client base that includes Google, Huawei, P&G and Ikea.