[THE INVESTOR] Investors are seeking to take legal action against Samsung BioLogics after the firm lost a whopping 8 trillion won (US$7.43 billion) in market cap in a week, hit by profit-paddling allegations raised by the nation’s financial authorities.
“A handful of individual investors who suffered losses over the week are seeking to file a suit,” said Kim Kwang-joon, an attorney with law firm Hankyul.
Samsung BioLogics CEO Kim Tae-han
What’s at stake in Samsung BioLogics accounting scandal?
Kim said the key defendants are Samsung BioLogics and its outside auditors Samjeong KPMG and Deloitte Anjin for their possible wrongdoings. He added he will also list the nation’s financial watchdog Financial Supervisory Service and the Korean government as defendants for announcing the fraud allegations ahead of a final ruling.
On May 3, the FSS announced Samsung BioLogics, the contract drug manufacturer affiliate of Samsung Group, breached accounting rules to inflate its net profit before its 2016 listing. Following the tentative ruling that will be finalized by the top regulator Financial Service Commission in the coming weeks, the share price nosedived almost 25 percent between April 30 and May 4. On May 10, the shares closed at 389,500 won, down 2.14 percent from a day before and a plunge from its peak of some 600,000 won in mid-April.
Samsung BioLogics, however, is flatly refuting the FSS’ ruling, hinting at an administrative lawsuit against the country’s financial authorities.
“We had no reason to ‘intentionally’ breach any accounting rules and firmly disagree with the FSS’ allegations that we did any wrongdoings. We are confident that no accounting fraud has been committed,” CEO Kim Tae-han said in a letter to investors on May 3.
By Park Han-na (email@example.com)