The 63-year-old is accused of receiving illegal political funds from his aide, identified only by his surname Sohn, while leading the project.

KORAIL was behind a project in Yongsan, located in the heart of Seoul. The 31 trillion-won ($25.1 billion) project was meant to transform the area near the key railroad station into an international business hub. The project fell through in 2013.

Prosecutors are investigating whether Huh used his influence as the KORAIL chief to help Sohn clinch business contracts for his waste management company in return for receiving money to create a slush fund.

"I did my best to make the project survive for the country, the people and the citizens of Yongsan. It is regrettable that it fell through after I stepped down from the KORAIL post," Huh told reporters before entering the prosecutors' office, denying any involvement in Sohn's irregularities.

Huh also served as Korea's chief of police before becoming the head of the rail operator. (Yonhap)