SEOUL — Korean PR firm News Communications has become entangled in the ongoing probe into Daweoo Shipbuilding & Marine Engineering (DSME), according to media reports in the country.

News Communications CEO Soo Park was reportedly questioned by prosecutors on Monday, after her agency's offices were raided last week, in connection to suspected corruption and accounting fraud at DSME.

Prosecutors are understood to be focusing on a contract worth around $1.8m, signed between DSME and News Communications in 2008. According to industry sources, the sum in question outstrips the services provided by the firm, and took place during Nam Sang-tae's tenure as DSME CEO.

Nam has been indicted on charges of accounting fraud and embezzlement, including allegations that he lobbied politicians and government officials to extend his term. It has also been reported that News Com 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.

Government lobbying is illegal in Korea, and media reports suggest that Park denies the allegations, regarding which no formal arrest warrant has yet been issued. But the case also indicates the changes afoot in Korea's public relations industry, where many firms are shifting towards broader services beyond traditional media relations.

"We all do a certain amount of media relations and crisis management," said one industry source, noting that ethical challenges are less of an issue than they once were. "The market has changed."

"The majority of Korean PR firms and professionals, within the broad range of their cultural norms, operate with integrity," added another industry source. "I don’t think this is a blemish on Korean PR firms. It’s a blemish on News Communications and Soo Park."

Founded in 1997 by Park and two other industry executives, News Com grew to become one Korea's top independent PR firms. It is now thought to number around 30 staff, working for such clients as Google, GE and Herbalife.

Park began her PR career at Merit, the firm founded by Bill Rylance that was eventually sold to Burson-Marsteller. She did not respond to request for comment.