Donga Pharmaceutical under probe for slush fund

The Seoul prosecution service said Tuesday that it was investigating allegations that South Korea's largest drug manufacturer, Donga Pharmaceutical Co., has created slush funds by buying and selling gift cards.

Donga Pharmaceutical is suspected of buying tens of million dollars of gift cards by corporate credit cards and resold them to secure cash, prosecution officials said.

A gift card is exchanged for cash at a discount at the local black markets.

Prosecutors said they were trying to find out the exact amount of Donga Pharmaceutical's slush funds and where the money was used.

The company has also been under investigation on suspicions that it offered illegal kickbacks worth 9 billion won ($8.07 million won) to doctors and hospitals in exchange for prescribing their products. (Yonhap News)