Prosecutors said Monday they banned former National Tax Service Commissioner Jeon Goon-pyo from leaving the country pending an investigation into allegations that he received bribes from CJ Group.

Jeon, who served as the NTS chief from July 2006 to Nov. 2007, is alleged to have received illegal money and a luxury watch from CJ Group chairman Lee Jay-hyun in return for shielding the group from tax inspections.

The prosecutors investigating the case are said to have obtained testimony from Lee and other CJ officials that Jeon and former NTS deputy chief Hur Byung-ik were bribed to avoid audits.

Jeon is expected to be summoned soon.

In 2006, the Seoul branch of the NTS is said to have secured evidence to collect taxes in excess of 350 billion won ($315 million) from the group. However, no additional taxes were levied on the conglomerate in that year.

Lee is currently under detention on multiple charges, including embezzlement and tax evasion, the evidence for which emerged during the investigation into his slush funds.

Along with Lee, CJ Global Holdings vice president Shin Dong-ki has been indicted on similar charges. Shin is also suspected of having managed Lee’s slush funds.

Acting on orders from Lee to bribe tax officials, Shin sought out Hur in 2006. Hur is said to have close ties with Jeon as the two are of the same age and both come from Gangneung in Gangwon Province.

The prosecution, however, suspects that Hur took the initiative in demanding money from the group, saying that money was required for the confirmation hearing for the NTS chief’s post in that year.

Shin is reported to have told the investigators that he gave Hur a black bag containing $300,000 at his office in central Seoul. Soon after, the two CJ Group executives and the two former NTS officials are alleged to have met at a hotel in Seoul, where Hur was given two luxury watches as an inauguration gift for Jeon.

Hur has admitted to being involved in the process, but is denying that he received any money or gifts for himself.

Speaking at the court hearing for his detention, Hur said that he did receive the money from CJ Group officials but that he handed it over to Jeon in full without even looking inside the bag. Regarding the gift, Hur claims that he was only given one watch, which he delivered to Jeon.

Jeon is reported to have denied all allegations, calling them “absurd.”

“If Hur delivered anything (to Jeon) why would he have been detained, (Hur’s claims) seem to lack credibility,” an unnamed close associate of Jeon was quoted as saying by a local news agency.

By Choi He-suk (cheesuk@heraldcorp.com)