Feb. 11 (Bloomberg) -- Chun Jae Yong, a son of former South Korean President Chun Doo Hwan, was arrested yesterday on tax evasion charges in connection with slush funds he allegedly helped his father hide, prosecutors said.

About 7.35 billion won ($6.3 million) of the 16.7 billion won that Chun Jae Yong held in bank accounts under false names was found to have come from his father, Prosecutor-General Ahn Dae Hee said in a briefing.

The second son of the former president used the money to buy stocks, real estate and bonds and to invest in companies, prosecutors said. Chun Jae Yong was summoned for questioning when he arrived in Seoul on Feb. 1 after leaving for the U.S. 10 months ago.

Chun Doo Hwan told a court hearing last year he had less than 300,000 won, or $258, in financial assets. Chun was sentenced to death in 1996, later reduced to life imprisonment, after he was found guilty of taking bribes and amassing slush funds of about 220 billion won during his 1988-1992 presidency. He was granted a pardon in 1997 by then President Kim Dae Jung. Chun still owes about 189.2 billion won in fines.

Messages left at the offices of Lee Yang Woo, the lawyer for both the father and son, were not immediately returned.

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net.

Last Updated: February 10, 2004 19:56 EST