[THE INVESTOR] Korea’s top financial regulator pledged on June 7 that its ruling on Samsung BioLogics' alleged accounting irregularities will be “fair and balanced” so that its verdict can be accepted by all the concerned stakeholders.
The Securities and Futures Commission, a sub-body of the Financial Services Commission, is holding its first session today to decide whether Samsung BioLogics violated accounting rules to exaggerate the value of its affiliate Samsung Bioepis in 2015.
Samsung BioLogics CEO Kim Tae-han (center) visits the FSC.
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“All judgments and decisions of the Securities and Futures Commission will be made impartially and implemented based on objective facts and international accounting standards with no bias,” Kim Yong-beom, FSC vice chairman who heads the SFC, said ahead of the meeting.
The authorities were originally expected to make a final decision on Samsung BioLogics today, with industry sources predicting radical penalties such as dismissing the company CEO Kim Tae-hand and a fine of up to 6 billion won (US$5.58 million). But the process is now expected to take longer.
FSC Vice Chairman Kim Yong-beom.
“Every decision made by the SFC will greatly affect the trust of market participants as this case has a large impact on the market and has drawn keen public attention,” Kim explained.
The SFC, which includes government officials and accounting experts, didn’t provide an exact timeline for the final verdict but is likely to hold two to three round of meetings and make the final decision by end-June or early July, according to those close to the matter.
The delay comes after financial authorities apparently failed to reach a consensus in previous meetings. The FSC said the firm will have another chance to defend itself. “We will guarantee the company every opportunity to defend itself,” said the vice chairman.
Samsung BioLogics continues to claim that it was not in the wrong, and that it followed rules backed by Korea’s top three accounting firms.
Founded in 2011, the Samsung sunsidiary quickly expanded its business over the years to eventually conduct a US$2 billion initial public offering in 2016. Its three plants have a total production capacity of 362,000 liters.
But since the Financial Supervisory Service leaked on May 2, after a tentative review, that it is guilty of an accounting breach, its stock price has declined by over 13 percent.
By Park Han-na (firstname.lastname@example.org)