South Korean prosecutors on Friday decided not to indict the president of Kia Motors, Chung Eui-sun, over a probe into a cash-for-favours scandal involving the Hyundai Motor group, Reuters reported.

The Kia president, who was previously questioned over the case, is the son of Hyundai Motor group chairman Chung Mong-koo, who was arrested in late April and is on trial on charges of embezzling company funds, the report noted.

Analysts reportedly said the decision not to indict the younger Chung was positive for the group but did not fully resolve the current management vacuum at the world's sixth largest auto maker by sales volume.

"We decided not to indict Chung Eui-sun because, from a legal point of view, Chung Mong-koo has final responsibility," Kang Chan-woo, a spokesman for the Supreme Prosecutors' Office, told Reuters.

"There is something too harsh in indicting the son when the person responsible for the wrongdoing has already been arrested and indicted," Kang said.

According to the news agency, Kang said the senior Chung had admitted to some of the charges that were levelled at his son, including two counts of breach of trust surrounding Hyundai affiliates.

Prosecutors did indict Hyundai Motor vice chairman Kim Dong-jin, and three other senior executives at the Hyundai Motor group, but did not arrest them, Reuters noted.

"We've avoided the worst-case scenario, in which both father and son would have been jailed," Suh Sung-moon, an analyst at Korea Investment & Securities, told Reuters.

Analysts and company insiders have said the charismatic chairman who is being held in a detention centre near Seoul used to have a hand in almost every decision at South Korea's top car making group.

"Even in order to designate a second-in-command, Chung Mong-koo must come out of jail," Stephen Ahn, an analyst at Woori Investment and Securities, told the news agency.