"It is hard to find a reason, necessity and appropriateness for the arrest at the current stage," the Central District Court in Seoul said, according to state media.
Following the announcement, Lee — who has led the country’s largest conglomerate since his father, Lee-Kun-hee, suffered a heart attack in 2014 — was immediately released from a detention center outside Seoul where he was held overnight pending the court’s decision to grant the arrest warrant.
Thursday’s court decision "was very regrettable," spokesman for the special prosecutor Lee Kyu-chul told reporters.
Prosecutors requested Lee’s arrest on charges of bribery, embezzlement and perjury on Monday. They will continue to pursue the case but have not decided whether to request another arrest warrant, Reuters reported.
Investigators are accusing Lee of paying 43 billion won (US$ 36.42 million) in bribes to organizations linked to the president’s childhood friend Choi Soon-sil to secure the 2015 merger of two Samsung affiliates and solidify his control of the business.
Choi, the president’s confidante at the center of the scandal, has been detained since late October. She has been charged with abuse of power, attempted fraud, bribery and obstruction of business.
South Korea’s parliament voted overwhelmingly on Dec. 9 to impeach President Park, giving the power of the president to Prime Minister Hwang Kyo-ahn. The country’s Constitutional Court was given 180 days to review the impeachment.
