The interim leader decided not to extend a special prosecutor’s investigation which involves his predecessor, President Park Geun-hye.
Prosecutors want more time to question her over the scandal.
Park Geun-hye is awaiting a separate ruling on her December impeachment from the constitutional court.
She is still technically president, though she has been stripped of her powers while the constitutional court decides her fate. As long as she remains president, she is immune from prosecution.
However, the wider corruption investigation which emerged from the scandal will now end on February 28, before special prosecutors have the opportunity to question Park Geun-hye.
Any further investigation will fall to individual state prosecutors.
Hwang Kyo-ahn, who remains prime minister while he sits in for the president, said that continuing the investigation is not in the best interests of the nation.
His spokesman said: “After much deliberation [the acting president] has decided that it would be best for country’s stability to not extend the special investigation and for the prosecutors to take over.”
Choo Mi-ae, leader of the main opposition Democratic Party, said Hwang Kyo-ahn’s decision indicated he was trying “to become Park’s shield to protect her and her associates”.
Park Geun-hye was impeached weeks after her old friend Choi Soon-sil was arrested.
In a written statement on February 27, Park Geun-hye maintained her innocence, but said she had “belated regret, that I should have been more cautious with my trust in her.”
Choi Soon-sil is accused of using her presidential connections to pressure companies for millions of dollars in donations to two non-profit foundations she controlled. President Park Geun-hye is alleged to have been personally involved.
On November 20, Choi Soon-sil was charged with various offences, including abuse of authority, coercion, attempted coercion and attempted fraud, leading to the wider investigation.
Samsung vice-president was also arrested in connection with the probe.
The company is accused of giving donations to non-profit foundations operated by Choi Soon-sil in exchange for government favors.
Park Geun-hye’s case at the constitutional court also heard the final arguments on February 27. It is not known when the final verdict will be delivered.
The court may reject Park Geun-hye’s impeachment, restoring her powers and returning the country to its status quo.
If, however they uphold the parliament’s decision, a presidential election must be held.
Hundreds of thousands of protesters have taken to the streets calling on ousted President Park Geun-hye to step down immediately, rather than continue to fight her impeachment in the constitutional court.
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