The Seoul Central District Court said "there is room for dispute" over Samsung BioLogics CEO Kim Tae-han's alleged role in pushing the company to intentionally violate the country's accounting rules by inflating the value of its subsidiary, Samsung Bioepis, ahead of BioLogics' 2016 initial public offering. He is also accused of embezzling some 3 billion won ($2.6 million).

The rejection comes after the court in May turned down a prosecutors' request for an arrest warrant for Kim over charges of abetting the destruction of evidence in fraudulent accounting. 

The CEO, upon arrival at the court on Friday, said nothing when asked by reporters whether he acknowledges the charges. 

Earlier, eight Samsung officials and executives were arrested for allegedly destroying evidence in an accounting scandal.

Prosecutors have been looking into suspicions that the accounting fraud may have served to benefit a 2015 merger between two Samsung units and thereby enhance Samsung Electronics Vice Chairman Lee Jae-yong's control of Samsung Group.

The alleged fraud could have inflated the value of Cheil Industries Inc.'s stake in Samsung BioLogics, ahead of its merger with Samsung C&T Corp. in 2015, according to civic groups. Lee was a major stakeholder in Cheil at that time.

The fraudulent accounting is estimated to have amounted to 4.5 trillion won, according to the financial watchdog.

The then loss-making Samsung BioLogics reported sudden profits in 2015 after it changed the method used to calculate the value of Samsung Bioepis, a joint venture with US-based Biogen Inc.

Samsung BioLogics has maintained that the change of accounting methods was in line with international accounting standards. (Yonhap)