(Adds lawyer's comment, paragraph 11)
By James Pearson and Meeyoung Cho
SEOUL, April 24 (Reuters) - A boy and girl trapped in a sinking South Korean ferry with hundreds of other high school students tied their life jacket cords together, a diver who recovered their bodies said, presumably so they wouldn't float apart.
The diver had to separate the two because he could not carry two corpses up to the surface at the same time.
"I started to cry thinking that they didn't want to leave each other," he told the Kyunghyang Shinmun newspaper on the island of Jindo on Thursday, near where the overloaded ferry went down last week.
The parents of the boy whose shaking voice first raised the alarm that an overloaded ferry was sinking believe his body has also been found, the coastguard said.
The parents had seen his body and clothes and concluded he was their son, but he has not been formally identified.
More than 300 people, most of them students and teachers from the Danwon High School, are dead or missing presumed dead after the April 16 disaster. The confirmed death toll on Thursday was 171.
The Sewol ferry, weighing almost 7,000 tons, sank on a routine trip from the port of Incheon, near Seoul, to the southern holiday island of Jeju. Investigations are focused on human error and mechanical failure.
Prosecutors said they had raided two shipping watchdogs, the Korean Shipping Association and the Korean Register of Shipping, as part of their expanded investigation into the disaster. Yonhap news agency said they would investigate whether ship safety certificates were in order.
"The objective was to investigate malpractices and corruption in the entire shipping industry," Song In-taek, head deputy chief prosecutor at Incheon District Prosecution Service, told reporters.
Prosecutors have also raided the home of Yoo Byung-un, the head of a family that owns the Chonghaejin Marine Co. Ltd, the company that operated the Sewol. They had also seized another ferry run by the company to check for safety.
A lawyer for the family said it would take "all legal and social responsibility for this tragic accident if they have to as major stakeholders of the company". He did not say the family was assuming liability.
Of the 476 passengers and crew on board the Sewol, 339 were children and teachers from the school in Ansan, a gritty suburb on the outskirts of Seoul, who were on an outing to Jeju.
As the ferry began sinking, the crew told the children to stay in their cabins. Most of those who obeyed died. Many of those who flouted or did not hear the instructions and went out on deck were rescued.
Some of the bodies had their hands held tightly like foetuses to try to keep warm, a newspaper said.
Classes at the school resumed on Thursday with banks of flowers surrounding photos of each of the victims, dressed in their school uniforms. Almost 250 teenagers and teachers at the school have died or are presumed dead.
Fellow students filed past, offering white chrysanthemums in sombre tributes. Yellow ribbons, with names and messages inscribed, were tied around a chain-link fence.
FIRST DISTRESS CALL
In the classrooms of the missing, friends posted messages on desks, blackboards and windows, in the days after disaster struck, asking for the safe return of their friends.
"If I see you again, I'll tell you I love you, because I haven't said it to you enough," read one.
The school provided therapy sessions for the children as they returned.
The first distress call from the sinking vessel was made by a boy with a shaking voice, three minutes after the vessel made its fateful last turn, a fire service officer told Reuters.
The boy called the emergency 119 number which put him through to the fire service, which in turn forwarded him to the coastguard two minutes later. That was followed by about 20 other calls from children on board the ship to the emergency number.
The ship, 146 metres (479 feet) long and 22 metres wide, was over three times overloaded, according to official recommendations, with cargo poorly stowed and inadequate ballast.
Moon Ki-han, an executive at Uryeon (Union Transport Co.), the firm that supervised cargo loading, told Reuters there were 105 containers onboard, some of which toppled into the sea as the ship listed.
Forty-five were loaded on to the front deck and 60 into the lower decks, Moon said. In total, the ship was carrying 3,600 metric tons of cargo including containers, vehicles and other goods, he said.
A member of parliament this week said the Korean Register of Shipping recommended a load of 987 tons for the Sewol.
Captain Lee Joon-seok, 69, and other crew members who abandoned ship have been arrested on negligence charges. Lee was also charged with undertaking an "excessive change of course without slowing down".
One crew member said on Thursday she and six colleagues were "under command" to abandon ship.
The unidentified crew member, speaking briefly to reporters on the way from court back into detention, was hidden behind a surgical mask and wearing a baseball cap with a jacket hood. She did not elaborate.
Another crew member was asked if there was any discussion about trying to save the passengers.
"At that moment, we were on the third floor and except for the third floor situation, we weren't aware of anything else," the crew member said.
(Additional reporting by Kahyun Yang, Miyoung Kim, Sohee Kim an Ju-min Park; Writing by Nick Macfie; Editing by Raju Gopalakrishnan and Robert Birsel)