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(2nd LD) Regulator concludes 'intentional' accounting breach by Samsung BioLogics

2018/07/12 16:47

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SEOUL, July 12 (Yonhap) -- The financial regulator said Thursday it has concluded that a 2015 accounting breach by Samsung BioLogics Co. was intentional and the biopharmaceutical company clearly violated accounting rules.

The ruling by the Financial Services Commission (FSC) is expected to deal a serious blow to Samsung BioLogics, which has strongly denied allegations of accounting breach.

Kim Yong-beom, vice chairman of the FSC, speaks during a press conference on Samsung BioLogics on July 12, 2018. (Yonhap) Kim Yong-beom, vice chairman of the FSC, speaks during a press conference on Samsung BioLogics on July 12, 2018. (Yonhap)

In May, financial authorities gave a preliminary notice to Samsung BioLogics that it broke accounting rules in 2015.

The regulatory probe centers on questions about the biopharmaceutical company's sudden profits in 2015 after years of losses. Samsung BioLogics reported a net profit of 1.9 trillion won (US$1.72 billion) that year after changing the method used to calculate the value of its affiliate, Samsung Bioepis.

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

After holding a series of review sessions on punitive measures against Samsung BioLogics, the FSC asked the company to sack executives who were involved in the accounting breach and decided to refer the case to prosecutors for further investigation.

Trading of Samsung BioLogics shares could be suspended if the case is referred to prosecutors.

The FSC also ordered one of the auditors for Samsung Biologics, Samjong KPMG, to stop auditing the company for four years.

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