Ssangyong Motor Co., the South Korean unit of China's Shanghai Automotive Industry Corp., denied Saturday allegations that the carmaker leaked technology about a hybrid car to the Chinese company.

Prosecutors raided a research center of Ssangyong Motor in Pyongtaek, some 70 kilometers south of Seoul, on Friday over allegations that the parent company obtained technology related to an engine design of a hybrid car from Ssangyong through illegal means.

The prosecutors said since the development of hybrid technology is funded by the government, a technology transfer without the government's approval would be illegal.

"The allegation is groundless," Ssangyong Motor said in a statement, adding that although South Korea's smallest automaker is developing hybrid technology, the automaker is not in the stage of mass-producing it.

Ssangyong also said the Chinese carmaker already has enough technology to mass-produce hybrid engines and that the Korean carmaker is even considering getting a technology transfer from the parent company.

Ssangyong Motor has been suffering from a fall in vehicle sales at home amid sluggish domestic demand as oil prices are rising to a record high.

State-owned Shanghai Automotive bought a 51 percent stake in Ssangyong Motor for US$500 million in 2002.