Samsung BioLogics case to be back on regulator’s table this month

October 19, 2018

SEOUL, Oct. 19 (Yonhap) — The financial regulator said Friday it plans to begin the re-deliberation of the suspected accounting breach by Samsung BioLogics Co. later this month.

During a regular meeting on Oct. 31, the Securities & Futures Commission under the Financial Services Commission (FSC) will review the allegation that the bio firm broke accounting rules in 2015.

In May this year, the state watchdog, the Financial Supervisory Service, gave a preliminary notice to Samsung BioLogics that it committed an accounting illegality.

The drug manufacturer, however, has strongly denied all allegations and asked for a re-audit.

Accordingly, the FSC in July demanded that the watchdog revisit the case, and the re-audit was completed recently. Sources said the watchdog is expected to maintain its previous stance, which would lead to heavy penalties against the business entity.

“The FSC’s vice chairman, who heads the securities commission, was briefed on the 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.

“The FSC will skip the due deliberation by an advisory body, which is legally allowable, to wrap up the case in a prompt manner in order to resolve market uncertainties,” the official added.

After running losses for years, Samsung BioLogics reported a net profit of 1.9 trillion won (US$1.68 billion) in 2015 by changing the method of calculating the value of its affiliate, Samsung Bioepis.

Samsung BioLogics has claimed that the switch was in line with international accounting standards, while some civic groups and lawmakers have suspected that it may have inflated its profit to raise its value to benefit Samsung Group’s heir apparent Lee Jae-yong, who held a major stake in the company.