South Korea’s financial watchdog said Tuesday that Samsung Group‘s bio unit has violated accounting rules, and corrective measures and punishment may be taken depending on the final outcome.
Since March last year, the Financial Supervisory Service (FSS) has been conducting a special audit on Samsung BioLogics Co., a biopharmaceutical unit of Samsung Group, over alleged accounting irregularities.
The bio firm’s accounting flaw boils down to whether there were any irregularities over a dramatic business turnaround in 2015.
Samsung BioLogics headquarters in Songdo, Incheon (Yonhap)
Samsung BioLogics, listed on the local stock market in November 2016, reported a net profit of a whopping 1.9 trillion won in 2015, shifting from a loss in the previous four years.
In 2015, Samsung BioLogics adopted the mark-to-market accounting scheme for Samsung Bioepis, a joint venture with U.S.-based pharmaceutical company Biogen Inc., which boosted its equity gains from the JV.
Previously, Samsung BioLogics adopted a face-value accounting method for its stake in the JV.
Mark-to-market is an accounting method of valuing securities or financial instruments that a company holds at the current market prices. (Yonhap)