SEOUL - AN INDEPENDENT prosecutor on Tuesday launched a criminal inquiry into fraud allegations against South Korea's next president Lee Myung Bak, just six weeks before he is set to take office.

Mr Lee, a former construction CEO who strongly denies wrongdoing, is the first president-elect from a business background and the first to face a criminal probe.

His inauguration appeared set to go ahead on Feb 25 regardless of the outcome of the investigation, given the time constraints.

Former high court chief judge Chung Ho Young and five deputies opened an office to launch the investigation, and Mr Chung said the future leader might be summoned for questioning.

'We'll be using all necessary methods to collect evidence. If it is necessary, he will be summoned,' he told reporters.

Mr Lee won the biggest victory margin in the country's democratic history in the December 19 presidential poll despite the allegations.

State prosecutors in early December had cleared him of involvement in the fraud.

But parliamentary opponents of Mr Lee, citing what they termed new video evidence, voted to set up the independent probe.

The 66-year-old president-elect indicated on Monday that he expects to be exonerated again.

'The prosecution has already conducted a thorough investigation and questioned those involved,' he said.

'I expect the independent counsel also to do a fair and good job.'

The inquiry can last for up to 40 days - or until Feb 24 - but the counsel should announce whether the case is indictable before the 30th day on Feb 14.

'A criminal indictment by itself cannot block a president-elect from taking office,' a constitutional court official told reporters on condition of anonymity.

'But a big debate would follow on whether a criminal trial should continue because an incumbent president is immune from prosecution (except for treason).'

The constitutional court ruled last week that the probe should go ahead despite a challenge from Mr Lee's supporters.

But it restricted the counsel's powers by refusing him permission to call witnesses without a warrant.

Some analysts believe the probe can lay suspicions to rest.

'Despite the prosecution's earlier probe, suspicions have remained widespread.'

'The investigation can somehow help Mr Lee Myung Bak to make a fresh start and then run the country,'

Im Ji Bong, a political science professor at Sogang University, told Yonhap news agency.

The case involves Mr Lee's former business partner Kim Gyeong Jun, whose trial for stock manipulation, embezzlement of 38 billion won (S$60 million dollars) and forgery began on Monday.

Mr Lee denies any knowledge of stock manipulation and says he was himself a victim of the fraud.

The independent counsel will also investigate whether Mr Lee lied about his wealth and alleged ownership of real estate in an upmarket district of Seoul. -- AFP