April 26, 2024

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[THE INVESTOR] Wrapping up a month-long review, the country’s top financial regulator is poised to hold the final session of Samsung BioLogics' alleged accounting irregularities on May 31 before deciding on the future course of action. 
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The biotech drug manufacturer of Samsung Group has been fiercely defending itself over the past two weeks, following charges raised by the Financial Supervisory Services which accused it of breaching accounting rules on May 2. 

The meeting will be a wrap-up discussion among members of the top regulator Financial Services Commission’s in-house accounting oversight panel to refer the case to the Securities and Futures Commission for a final ruling expected on June 7. Samsung BioLogics and the FSS will not give their testimonies at the third review session.

The company has been trying to reverse the FSS’s tentative ruling to avoid its potential punitive actions which include dismissing the company’s CEO Kim Tae-han as well as a fine of 6 billion won (US$5.58 million).

Just ahead of its KOSPI listing in 2016, Samsung BioLogics had allegedly misapplied an accounting method to overestimate the value of its affiliate Samsung Bioepis to shore up its balance sheet and show profits in 2015.

A civic group and lawmakers have been casting doubts over Samsung BioLogics’s listing process and accounting books for years as the company suddenly reported a net profit of 1.9 billion won in 2015 after logging losses for consecutive years since its foundation in 2011.

Samsung BioLogics claimed that the FSS, which had conducted its own due diligence on the firm in May 2015, concluded that the accounting treatment was done correctly at that time. “As such, FSS accepted our registration statement for IPO, and the firm was successfully listed on KOSPI,” Samsung BioLogics said via an online post on its website.

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