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Prague, Apr 26: The Czech government believes a bribery scandal at South Korea's Hyundai Motor Co. will not upset the automaker's plan to build a $1.2 billion new car plant in the country, a cabinet minister said.

Czech Industry and Trade Minister Milan Urban was quoted in the business daily Hospodarske Noviny on Wednesday as saying he had some concerns about the fate of the planned investment, but saw no reason at the moment to review the deal with the company.

Hyundai has said it would invest up to 1 billion euros ($1.24 billion) to build a factory to produce 300,000 cars from 2008, in what would be one of the biggest foreign direct investments in the EU newcomer's history.

But the day before the company signed a memorandum with the Czech government in late March, the Hyundai group became the centre of investigation at home into whether it operated slush funds and offered cash for political favours via a lobbyist.

''Obviously, I am concerned about the impact the investigation may have on the investment, therefore I wrote a letter to my counterpart in the South Korean government, where I voiced this concern, but also added my strong belief that the case will not influence the (investment) project,'' Urban said.

''So far, there is no reason to change the timetable, which has been written into and endorsed in a memorandum which we signed (with Hyundai),'' the newspaper quoted him as saying.

Company officials in South Korea said the probe into alleged illegal political lobbying at the group had already made Hyundai postpone the groundbreaking ceremony at the site of the planned plant in the Czech Republic, originally scheduled for mid-May.

But Urban said he was ready to travel to South Korea if need be to sign a final agreement with Hyundai on Czech government incentives and other conditions for the plant, which is expected to create 3,000 direct jobs and another 10,000 in spin-offs.

Equity analysts in Seoul said Hyundai was unlikely to give up foreign projects as overseas operations were key to future growth, due to the squeeze that a firm South Korean won is putting on exports.

Hyundai has been pushing to raise output at overseas plants to shield itself from the stronger local currency, as part of its plan to be among the world's top five car makers by 2010 together with its affiliate, Kia Motors Corp. .

Reuters