Hermes' past investment in Samsung is under scrutiny

The executives, from fund management firm Hermes, travelled voluntarily to Seoul to answer prosecutors' questions.

Investigators are examining claims that Hermes conspired to talk up the value of shares in consumer electronics firm Samsung before selling its investment.

Hermes has denied the charges, saying it will defend itself vigorously.

Newspaper interview

South Korean financial regulators claim that Hermes Pensions Management breached stock market rules by intentionally giving out false information about Samsung for its own financial benefit.

They referred the case to prosecutors in July.

We believe that Hermes has done nothing wrong under Korean laws Tony Watson, Hermes Pensions Management chief executive

The initial inquiry was triggered by an interview given by Robert Clements, a former Hermes employee, to Korean newspaper Chosun-Ilbo in November 2004.

Regulators claim that Mr Clements wrongly gave the impression that Samsung might be the subject of a takeover in which Hermes could be involved, resulting in a rise in Samsung's share price.

Hermes decided to sell its stake in Samsung two days after the interview was published.

Regulators claim the sale enabled the firm to make a profit of 38bn won (�211m; $365m).

No evidence

Hermes said there was no evidence that Mr Clements was involved in any irregular transactions or that any price manipulation had occurred.

It said Mr Clements had given the interview in order to correct inaccurate claims circulating in the press that Hermes could lead a hostile takeover of Samsung.

The decision to sell its investment was based on unrelated factors, the company added.

These included an assessment of the future performance of Samsung Electronics, Samsung's key subsidiary and a proposed change in the law likely to favour investment in domestically-focused companies at the expense of exporters like Samsung.

Hermes chief executive Tony Watson - one of four senior executives to travel to Korea - emphasised that they had gone voluntarily and under their own initiative.

"We believe that Hermes has done nothing wrong under Korean laws," he said in a statement.

"We look forward to a speedy resolution of this matter."

Hermes has since ended Mr Clements' contract for misconduct unrelated to the investigation.

Hermes has been doing business in Korea for more than 20 years.

It currently manages investments worth more than $500m in Korea and $95bn worldwide on behalf of pension funds.