바이오스펙테이터

by Jongwon jang

Samsung BioLogics will file an administrative lawsuit and application to suspend and invalidate the Securities and Futures Commission(SFC)'s decision to suspend the company due to alleged accounting fraud.

"We are planning to apply for administrative litigation and suspension of execution as soon as the notice of the measures of the commission is delivered," Samsung BioLogics said on the 23st. They plan to take relevant procedures within next week, as the Supreme Court had, on the day before, sent a notice of action to Samsung BioLogics, along with the prosecution's charges.

The Securities and Futures Commission, under the Financial Services Commission, concluded on the 14th that Samsung BioLogics had committed a serious and deliberate accounting violation regarding the change of Samsung BioEpis’s status from a subsidiary to an affiliate in 2015. As a result, the Securities and Futures Commission has suspended the trading of Samsung BioLogics stock for the time being, and is being evaluated for possible delisting from the Korea Stock Exchange. The Securities and Futures Commission also decided to restate its financial statements, recommending the dismissal of the representative director and imposing a penalty of 8 billion won.

Samsung BioLogics plans to request that the commission suspend both its enforcement of the request for the restatement of financial statements and the recommendation of dismissal of the representative director.

However, if the court does not quote the application for suspension, Samsung BioLogics will have to revise its financial statements within a month from the date of receipt of the enforcement letter. In addition, the agenda for dismissal of the representative director should be posted to the general shareholders' meeting, and the results should be reported to the Financial Supervisory Service within one month from the date of the shareholders' meeting.

The Korea Stock Exchange will decide whether to review the delisting of Samsung Bio within 15 to 30 business days from the 14th, which is when the commission decided on sanctions. If it is subject to deliberation, the corporate judging committee will convene within 20 days and decide whether to delist within the next seven days. Trading can be suspended for up to 57 business days if possible subsequent procedures (such as granting an improvement period and appeal) are not taken into account.

Meanwhile, Samsung BioLogics posted a series of questions and answers regarding the controversy on its homepage. "The financial statements of our company and Samsung BioEpis have no accounting issues in terms of business," Samsung said. "We established Samsung BioEpis in 2012 as a joint venture with Biogen in the United States, and it is merely a difference in the accounting interpretation that occurred in the process of reflecting Samsung BioEpis, a joint subsidiary in our accounting books."

"The decision of The Securities and Futures Commission is not just an accounting issue for us, but is also very important to the trust of our customers and investors that are directly linked to our business.”

Samsung added, "We will continue to do our best to prove the appropriateness of our accounting practices.”