A former chief of the national tax agency on Monday denied charges that he took bribes from CJ Group in return for providing favors during a tax audit into the local food and entertainment conglomerate.

Jeon Goon-pyo, who led the National Tax Service (NTS) from July 2006 to November 2007, has been accused by his former staff of receiving cash and expensive watches from CJ Group in late 2006.

"Accusations that I received US$300,000 in U.S. bills and a watch are absolutely not true," Jeon told Yonhap News Agency, adding that he has hired a lawyer to prepare for a prosecution investigation.

After indicting CJ Group Chairman Lee Jae-hyun earlier this month for a separate corruption case, the Seoul Central District Prosecutors' Office has been expanding its probe into alleged bribery exchange between the local family-run conglomerate and former top NTS officials.

On Saturday, Heo Byung-ik, who had served as the deputy commissioner of the NTS under Jeon, was formally detained on charges of receiving US$300,000 in U.S. bills and high-end watches from CJ group.

CJ Group officials alleged that they have given the money to Heo, asking him to relay it to Jeon, who was just named the head of the tax agency at that time, according to prosecutors. The group was under government scrutiny for alleged tax evasion at that time.

In return, the group officials allegedly asked for the tax officials not to initiate a tax audit into the group.

In a court hearing Saturday before the arrest, Heo admitted taking the money, but claimed that he had handed over the gifts and the money to Jeon, according to prosecutors.

Jeon vehemently denied Heo's argument, saying that he has gone through a similar incident before.

In 2011, Jeon was under a prosecution probe for allegedly receiving a high-priced painting from the agency's No. 2 official in exchange for securing the top post before he was officially given the job.

Upholding a lower court's ruling, a Seoul appeals court acquitted Jeon in August 2012.

The prosecution office, meanwhile, is focusing on proving allegations that Jeon peddled his influence for CJ Group, prosecutors said.

Jeon, who has been banned from leaving the country, is expected to be summoned by prosecutors for questioning sometime soon, they added. (Yonhap News)