Prosecutors’ plans to wrap up a yearlong investigation of alleged financial fraud by Samsung Group affiliates faced a setback Tuesday, when a court denied arrest warrants for the group’s de facto chief and two other former executives.

Now that the Seoul Central District Court has decided not to detain Samsung Electronics Vice Chairman Lee Jae-yong or former Samsung executives Choi Ji-sung and Kim Jong-joong, the prosecution is weighing its options.

It could seek the warrants again, or it could indict the trio without detention.

At the end of a hearing that lasted more than eight hours, Judge Won Jung-sook said prosecutors’ arguments in favor of arresting Lee and the other former executives fell short of convincing her to go against the general rule -- that of allowing defendants to stand trial without being detained.

In South Korea, arrest warrants are reserved for cases where the suspect has no fixed dwelling or when there are reasonable grounds to believe he or she might attempt to escape or destroy evidence.

“The basic facts have been all explained. And prosecutors seem to have already secured a considerable amount of evidence through the investigation,” she said.

Won noted the need for due process to determine a defendant’s guilt or innocence under the law.

The implications of the ruling can be interpreted in two ways. Prosecutors believe the court gave them the green light to go ahead with indictments, and that the legitimacy of its investigation is unmarred.

After the court announced its decision, the prosecution issued a relatively subdued statement. “Regardless of the outcome, we will do our best to continue the investigation according to law and principle going forward,” it said.

Lee’s lawyers see a chance to thwart the prosecution’s plan to indict Lee by putting the matter before an independent panel.

“We expect whether prosecutors will continue their probe and indict (the defendants) will be decided through thorough deliberation in the external review procedures for investigation,” they said in a statement.

By Park Han-na (hnpark@heraldcorp.com)