Businessman still wanted on charges of embezzlement and tax evasion

South Korean police on Friday arrested the brother of a South Korean businessman linked to a ferry disaster in April in which hundreds of schoolchildren drowned, as the net appeared to tighten around the fugitive's family.

But Yoo Byung-un, 73, a businessman and photographer, is still on the run, eluding one of the country's biggest and most bizarre manhunts for more than a month, centered on a huge church sect compound south of Seoul.

His elder brother, Yoo Byung-il, was arrested near the leafy compound in Anseong, where police are checking all passing vehicles and pedestrians.

Yoo Byung-un's daughter, Yoo Som-na, has been held in France since May 28 after Interpol called for her arrest "for fraud and embezzlement". She was denied bail on Wednesday

Yoo Byung-un is wanted on charges of embezzlement, negligence and tax evasion stemming from a web of business holdings centered on I-One-I, an investment vehicle owned by his sons that ran the shipping company, Chonghaejin Marine.

Chonghaejin owned the Sewol, which sank off the southwest coast on April 16 killing more than 300 people, many of them schoolchildren, on a routine journey from Incheon on the mainland to the southern holiday island of Jeju.

Yonhap news agency said the brother received monthly consulting fees from Chonghaejin and was arrested on charges of embezzlement and fraud-related real estate deals. Prosecutors have not disclosed the charges.

Reuters was unable to verify the report independently.

Second raid

Police this week raided the Evangelical Baptist Church compound for the second time as they tried to flush out Yoo, who is also the sect's co-founder, combing its grounds for two days with earth movers and sniffer dogs.

On Friday, the religious group invited journalists into the grounds, accusing police and prosecution officials of exceeding terms of their search warrant and damaging private property.

"The deer, birds and fireflies were likely startled, and there is damage everywhere," group spokesman Cho Kye-ung said.

Sect members grow organic produce and run fresh water fish farms. Yoo is believed to have had a large office on the compound that included a photography studio.

Authorities have detained a middle-aged female sect member who is accused of helping him escape after she turned herself in on Friday. The police are still looking for another one of the key middle-aged female sect members known as "mamas".

The news briefing was held in a building called "Cleopatra" where Cho said Yoo Byung-il had been "coming to work" on the compound after retirement.

"This is not some religious place as people keep saying. It is a place of life and work for us," he said, after about 100 followers sang hymns.

Police believe Yoo Byung-un and one of his sons are still in South Korea. Another son is based in the United States, but his whereabouts could not be established by Reuters.

South Korea's Ministry of Security and Public Administration will distribute wanted posters of Yoo Byung-un and his son, a spokesman for the ministry said.