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Regulator begins review on another suspected accounting breach by Samsung BioLogics

By Yonhap

Published : Oct. 31, 2018 - 11:06

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South Korea's financial regulator on Wednesday started a review on another suspected violation of accounting rules at Samsung BioLogics Co., about three months after it concluded that the biopharmaceutical company intentionally violated accounting rules.

The regulatory probe centers on questions about Samsung BioLogics' sudden profits in 2015 after years of losses. Samsung BioLogics reported a net profit of 1.9 trillion won ($1.67 billion) that year after changing the method used to calculate the value of its affiliate, Samsung Bioepis Co., which is a joint venture with the U.S.-based Biogen Inc.

In July, the Financial Services Commission ruled that Samsung BioLogics violated accounting rules by failing to disclose a deal with Biogen on a call option for Samsung Bioepis.


Samsung Biologics (Yonhap) Samsung Biologics (Yonhap)

At that time, the FSC delayed a ruling on whether Samsung BioLogics also violated accounting rules by changing the method of calculation for value of Samsung Bioepis.

Samsung BioLogics has claimed that the change was in line with international accounting standards.

Wednesday's review session by the FSC is aimed at deciding whether the switch of valuation of Samsung Bioepis breached accounting rules.

Right before attending the review session, Samsung BioLogics CEO Kim Tae-han told reporters that he will "do all he can" to prove the company's innocence.

Kim said he will fully explain the company's stance to the FSC on the suspected accounting violation. 

A senior FSC official told reporters that the regulator will not make a ruling Wednesday and more review sessions will be held.

The FSC ordered in July that Samsung BioLogics must sack executives who were involved in the accounting breach and referred the case to prosecutors for further investigation.

Samsung BioLogics expressed regrets over the FSC's ruling, claiming that it had no "motive" to have intentionally violated accounting rules.

Shares of Samsung BioLogics fell 2.64 percent to 387,500 won on Wednesday. (Yonhap)

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