He said he was ready to fully co-operate with the government.
Mr Allawi, who spoke to The National from his home in London, stepped down from the position of deputy prime minister as well as minister of finance last August. A few months later he was accused of enabling the theft of $2.5 billion.
The officials named by the Iraqi government in the investigation include Mr Allawi and aides to former prime minister Mustafa Al Kadhimi, whom Baghdad says now all live outside Iraq.
The four men, including Mr Allawi, are accused of “facilitating the embezzlement of sums belonging to the tax authorities”, the government’s anti-corruption agency said in March.
Mr Allawi denied involvement in a case that has shocked the Iraqi public and sparked outrage at the political elite.
“The whole thing to me is outrageous,” he said, adding," I was accused without knowing any of the details of the accusations."
“I am prepared to open whatever bank accounts they want from me and from my family … to be accused of these things is shocking.”
The government of Mr Al Kadhimi announced that the funds had been plundered from Iraq between September 2021 and August 2022, while Mr Allawi was in charge of the Finance Ministry.
The case was then followed up by the current Prime Minister Mohammed Al Sudani last October.
It centres on the discovery of 250 fraudulent cheques that were written from the commission to five shell companies between 2021 and 2022, which were then cashed. It is suspected that the funds had been flown out of the country from Baghdad's International Airport.
Mr Al Allawi accused Mr Al Sudani's government of attempting to “deflect every issue such as corruption, mismanagement and negligence” on the government of Mr Al Kadhimi.
“I was the No 2 man in the Kadhimi government. For whatever reason, I don't think that they would want to, but I don't think they can issue charges against Mustafa, so I'm the second best,” he said.
On Sunday, Haider Hanoun, the head of the Iraqi Commission for Integrity – the country's main anti-corruption agency – called on the “competent authorities in the US and the UK to co-operate in executing arrest warrants” issued against the four former Iraqi officials in March.
An Interpol red notice request was issued from Baghdad to arrest high-ranking former politicians including Mr Allawi.
However, the former finance minister denied that a notice from the international body had been issued against him.
“I checked the Interpol's website and my name is not on there. My lawyers in Baghdad have not confirmed and my lawyers in London have no record of it,” he said.
In March, the Iraqi government charged Mr Allawi but no actual letter or notification was given to him or his legal team.
“It wasn't presented to me. I mean, normally, the procedure is that the charge is given to you. Or if you're not there, they send it to your place of residence. It was posted on the website of the Integrity's Commission,” he said.
The charge, he said, was based on a “Saddam-era” law, in reference to the oversized powers the state held at that time.
“After 2003, there was human rights legislation, but never to the point where they could overcome a judge’s wish to use Saddam-era laws,” he said.
The scheme came to light when an internal audit by the Finance Ministry found that the General Commission for Taxes had fraudulently paid the funds to five companies. The initial finding took place during Mr Kadhimi‘s government.
The payments were made from a branch at the state-run Rafidain Bank located within the tax commission.
In Iraq’s deeply rooted patronage system, those who were able to carry out such operations would generally have links to powerful political factions.
“I want to say that, as it relates to me, there is no evidence that links me to the case or taking money from the heist. And I believe there is no evidence that I mismanaged my post, or that I was grossly negligent,” Mr Allawi said.
“What I saw during the time in the ministry was the tip of the tip of the iceberg.”
Assets belonging to Mr Allawi and the other three men have been frozen in Iraq since the arrest warrants were issued this year.
The Iraqi government has sought the return of the suspects to interrogate them.
The main suspect, who was detained in the case, is a businessman named Noor Zuhair Jassim, who is well connected to a number of political parties.
He was released at the end of last year on bail.
The Iraqi government says it has recovered $125 million of the funds through the seizure of assets belonging to him.
The heist is regarded as one of the worst abuses of public funds in Iraq, which ranks 157th out of 180 countries on the global Corruption Perceptions Index.