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THE INVESTOR
July 04, 2020
Big Reunion

Bio & Medicine

Samsung BioLogics guilty of window-dressing: FSS

  • PUBLISHED :May 01, 2018 - 17:49
  • UPDATED :May 01, 2018 - 17:49
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[THE INVESTOR] The Financial Supervisory Service on May 1 concluded that Samsung BioLogics inflated its net profit for the fiscal year of 2015, just a year before its public listing on the country’s benchmark KOSPI.

After posting four straight years of deficits since its establishment in 2011, Samsung BioLogics swung to the black with 1.9 trillion won (US$1.77 billion) of net profit in 2015. This was possible because the Samsung unit changed the evaluation standard for its holdings in affiliate Samsung Bioepis from “book value” to “fair market value,” resulting in equity gains from the money-losing sister company.




“We concluded that Samsung BioLogics violated accounting standards. We have notified the matter to the company for it to prepare for clarification with subordinate bureaus that will discuss penalties,” an FSS official said.

The preliminary notification is a procedure for informing the involved parties of the violation and the planned action before sending the issue to the Securities & Futures Commission.

The FSS sent the results to both Samsung BioLogics and its auditors – Samjeong KPMG and Deloitte Anjin. “We will work diligently to clarify (whatever we need to),” a Samsung BioLogics official told The Investor.

The FSS had been conducting a year-long audit on allegations that Samsung BioLogics had violated accounting regulations, which could be related to its listing November 2016 listing, the second-largest IPO on the KOSPI to date.

Samsung BioLogics stocks fell 3.56 percent to close at 488,000 won apiece on May 1. Prices had been on a downward trend since April 10 after recording all-time highs.

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

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