A local court on Saturday rejected a prosecution request for an arrest warrant for a former vice president of POSCO Engineering & Construction Co., who allegedly created a slush fund abroad.

The Seoul Central District Court turned down the request made Wednesday to formally arrest Chung Dong-hwa, 64, saying it is difficult to see the necessity in arresting him for an investigation.

Chung is suspected of stashing away about 10 billion won ($9.1 million) in secret reserves when he was the CEO of the company from 2009 to 2012, prosecutors said earlier.

While Chung denied most of allegations, prosecutors suspect he received rebates from POSCO E&C's subcontractors, including one that works for its Vietnam operations. (Yonhap)