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March 19, 2024

FSC to review Samsung BioLogics’ accounting fraud case on Oct. 31

PUBLISHED : October 19, 2018 - 16:43

UPDATED : October 19, 2018 - 16:45

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[THE INVESTOR] Korea’s top financial regulator said on Oct. 19 it will hold a meeting later this month to decide on penalizing Samsung BioLogics for alleged accounting fraud.

The Securities & Futures Commission under the Financial Service Commission will review the case on Oct. 31 involving the contract drug manufacturer’s change of accounting methods for its stake in Samsung Bioepis. It had invited suspicions of using the new standards to inflate Samsung Biologics’ 2015 earnings ahead of its initial public offering the following year.

 



The decision to hold the meeting comes about three months after the FSC requested the Financial Supervisory Service to provide a new audit report for the final decision in July.

It cited a lack of clarity and concreteness of the administrative measures that the FSS addressed in a report unveiled in May after conducting a yearlong probe.

“The FSC’s vice chairman, who heads the securities commission, was briefed on results of the re-audit earlier in the day and decided to deal with the case during the regular meeting later this month,” an FSC official said.

At that time, the top regulator failed to reach a conclusion on allegations that the Incheon-based company unfairly changed its control over Samsung Bioepis, its joint venture with US biotech Biogen. But it ruled that Samsung BioLogics had clearly breached accounting standards and deliberately omitted certain disclosures.

In the FSS’s latest report, it maintained its stance on the firm which could lead to tough punishments if upheld by the FSC, sources said.

Samsung Biologics has been claiming that there was no problem in the way the value of Samsung Bioepis was reflected in the books, which was reviewed by outside auditors and conducted in line with accounting standards.

By Park Han-na (hnpark@heraldcorp.com)

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