SEOUL—A South Korean court denied an arrest warrant for Lee Jae-yong, the scion of the Samsung conglomerate, for his alleged involvement in a national corruption scandal, the latest twist in a saga that has shaken the country’s political and corporate establishment.

The Seoul Central District Court early Thursday rejected prosecutors’ application to detain Mr. Lee, saying that it had difficulty “seeing the reason, necessity, and appropriateness of an arrest at this stage,” adding that there wasn’t a sufficiently strong basis to establish a bribery charge based on current investigations.

The court’s decision keeps Mr. Lee, the de facto head of the Samsung conglomerate, out of detention as the broader probe continues.

The move also throws some cold water on the special prosecutor’s investigation into allegations of bribery, embezzlement and perjury against Mr. Lee, which had been gaining momentum quickly in recent days.

A spokesman for the special prosecutor said in a statement Thursday that the court’s decision wasn’t consistent with its legal assessment of the charges. “We highly regret the court’s decision, but we will consider all necessary means to continue the investigation without interruption,” the spokesman said.