Prosecutors on Monday questioned the owner of an asset management firm at the center of a snowballing regional development corruption scandal over allegations that his firm received massive business favors in exchange for bribes.

Kim Man-bae, a former journalist, is facing a series of allegations in connection with how his previously little-known firm, Hwacheon Daeyu, was selected as a civilian partner for the 2015 development project in the city of Seongnam, south of Seoul, and reaped astronomical profits.

He is suspected of colluding with Yoo Dong-gyu, acting president of the Seongnam Development Corp. in charge of the city-run project, to get his firm to take part in the lucrative project to develop Seongnam's Daejang-dong district into apartment complexes.

Kim allegedly gave Yoo 500 million won ($418,769) as part of a deal to pay him a total of 70 billion won. Allegations have also been raised that Yoo is the real owner of one of Hwacheon Daeyu's seven subsidiaries, Cheonhwa Dongin No. 1, that is owned on paper by Kim.

Yoo has already been arrested on charges of breach of trust and bribe-taking.  

On Monday, Kim denied any wrongdoing, arguing he is the real owner of Cheonhwa Dongin No. 1 and claiming the allegations against him have been wrongfully raised by one of his business partners at odds over how profits should be divided.

"I am very sorry for causing a disturbance," Kim told reporters upon arriving at the Seoul Central District Prosecutors' Office.

"No illegal funds have been traded. Many of the suspicions that have been raised so far will be resolved if the prosecution looks into the list of money deposits and withdrawals."

The questioning of Kim is expected to last late into the night as there are many allegations to examine. At the end of the questioning, prosecutors could seek an arrest warrant for him on charges of offering bribes.

The scandal has been the hottest issue in South Korea amid opposition accusations that Gyeonggi Province Gov. Lee Jae-myung, who won the ruling Democratic Party's presidential nomination Sunday, is responsible as mayor of Seongnam at the time.

Yoo is considered a close associate of Lee, and it was when Lee was mayor that the Daejang-dong project was undertaken. Moreover, Kim interviewed Lee seven months before establishing the asset firm.

The main opposition People Power Party (PPP) has accused Lee of masterminding the whole scheme, and called for an independent counsel investigation into the scandal while urging Lee to step down as presidential candidate.

However, Lee has categorically rejected all allegations as "fake news."

Kim is also suspected of paying high-profile, influential people in the legal community, like former Supreme Court Justice Kwon Soon-il and a former special prosecutor, in the form of hiring them as its legal advisers.

Kwon was one of the highest court's justices who ruled in favor of Lee, who was accused of violating the election law. Before the decision, Kim was found to have visited Kwon many times as a reporter, spurring suspicions that Kim could have lobbied for Lee.

Kim flatly rejected the suspicions.

"The judiciary of our country isn't an organization that can be swayed like that," he said. "The talk about (Lee's) trial is so absurd." (Yonhap)