A South Korean court on Saturday approved arrest warrants for two vice presidents of Samsung Electronics over an accounting scandal, but rejected one for the head of the conglomerate's pharmaceutical arm, Yonhap news agency reported.
The Central District Court in Seoul said "there is room for dispute" over Samsung BioLogics CEO Kim Tae-han's supposed role in destroying evidence in 2015, the South Korean news agency said.
Samsung BioLogics, a contract drugmaker, is the third-biggest firm of its kind in the world by market share, and one of the South's 10 most valuable companies.
In November last year, Seoul's Financial Services Commission (FSC) said the Incheon-based firm "intentionally" violated accounting rules in 2015, a year ahead of its IPO, by inflating the value of a subsidiary.
After making losses for years, Samsung BioLogics had changed the valuation method of its 85% stake in another group affiliate, Samsung Bioepis, raising it by 4.5tn won (currently $3.8bn) and resulting in a net profit of 1.9tn won.
Related to the same scandal, the Central District Court endorsed warrants for the two vice-presidents of Samsung Electronics over allegations of destroying and manipulating evidence, according to Yonhap.
The electronics subsidiary is the flagship of Samsung Group, the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and it is crucial to South Korea's economic health.
Yonhap reported that the investigation has intensified after prosecutors discovered a computer server and tens of notebooks concealed under the floor of a Samsung BioLogics plant in Incheon, west of Seoul, during a raid earlier this month.
The FSC in November fined Samsung BioLogics 8bn won (currently $6.8mn) and suspended trading in its shares "for a while" to give stock market authorities time to decide whether it should be delisted.
It also asked prosecutors to investigate the firm for accounting fraud and advised Samsung BioLogics to dismiss Kim Tae-han.
Samsung BioLogics has said the firm was "confident" that it did not violate accounting rules, but apologised for "causing confusion" among investors and customers.
Samsung views pharmaceutical and healthcare businesses as a future engine for growth beyond its flagship businesses of mobile handsets and microchip production.
The electronics unit last month reported a slump in first-quarter net profits in the face of a weakening chip market and rising competition.
Samsung's reputation had taken a hit after the bribery conviction of Lee Jae-yong – the son and heir of the group's ailing current chairman Lee Kun-hee.
The junior Lee was a prominent figure in the scandal that ousted former South Korean president Park Geun-hye and was sentenced to five years in jail in August 2017.
He was freed in February last year after several of his convictions were quashed on appeal.
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