Park Kwang-kee, managing director of Thai Samsung Electronics Co. Ltd., and Kim Chung-jun, the company's general manager, were arrested in Bangkok and turned over to the police's economic and cyber crime division, which placed them in court custody.
Police Lt. Col. Phuthorn Pritsanananthakul said two Thai companies had filed fraud charges against the two executives.
One, Sam Corp., filed a criminal complaint alleging losses of 63 million baht (US$1.9 million; EUR1.4 million) because of fraud by Samsung, he said.
Another company, Triple A Prompt, filed a civil suit against Samsung last week, demanding compensation of 565 million baht (US$17.3 million; EUR12.7 million), he said.
Kim, allowed to speak to reporters at a news conference at the economic and cyber crime division, denied the allegations and said they were the result of a business dispute.
"We are restructuring our strategy in order to better serve the Thai market," he said. "During this restructuring, maybe some of our business partners lose some benefits."
He said the matter was under investigation and was expected to be resolved soon in court.
"We are very sure that we will win the case," he said. It was not immediately known whether he and Park would be granted bail.
Police and a woman working for TWZ Corp. confirmed that Sam Corp. - a subsidiary of TWZ - had filed a lawsuit alleging that Park had breached an agreement to provide promotional funds to help it sell Samsung mobile phones.
The woman, who refused to give her name because she said she was not authorized to release information to the media, said a number of other companies had filed similar suits.
TWZ's official spokesman, who also asked not to be named, said the dispute was not expected to affect the company's financial performance.
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