South Korea’s Supreme Court announced on Oct. 16 that it has approved a request by Samsung BioLogics to suspend the execution of penalties by the financial watchdog on Oct. 11.
The court’s recent decision came after the lower courts approved the same request of Samsung BioLogics in February and May this year.
The recent decision was about the financial authorities’ first penalty that levied on Samsung Biologics.
The Financial Service Commission enforced two separate penalties on Samsung Biologics after it concluded that the company had “arbitrarily interpreted the accounting rules and intentionally breached them in 2015.”
Back in July last year, it announced the first penalty -- dismissal of then-CEO Kim Tae-han and executives responsible for its alleged accounting misdeeds. At the time, the FSC also ordered the firm to revise its financial reports and name an auditor for three years.
Then in November last year, the FSC once again levied a 8 billion won ($6.73 million) fine on Samsung Biologics. The financial regulator also reiterated its order to dismiss its then-CEO and rewrite its financial report. This second penalty was also suspended on Sept. 6 by the top court.
The Seoul Administrative Court’s two rulings show that it has accepted Samsung BioLogic’s argument that enforcing the penalties before a formal court ruling can cause it unrecoverable damage.
Samsung BioLogics was alleged to have inflated its company value before its listing by introducing a new accounting method that recognized its US unit Samsung Bioepis as an affiliate, instead of a subsidiary.
By Song Seung-hyun (email@example.com)