Samsung BioLogics Could Be Delisted From the Stock Market Over Fraud
Samsung BioLogics, parent company of the biosimilar development business Samsung Bioepis, has been fined by the Republic of Korea’s financial regulatory body, The Securities and Futures Commission, after the commission ruled that Samsung had committed fraud.
Samsung BioLogics, parent company of the biosimilar development business Samsung Bioepis, has been fined by the Republic of Korea’s financial regulatory body, The Securities and Futures Commission, after the commission ruled that Samsung had committed fraud.
As reported by Nikkei Asian Review, the commission found that, in 2015, Samsung BioLogics used accounting methods that inflated the value of Samsung Bioepis ahead of an initial public offering in 2016.
In addition to imposing a fine of approximately $7.05 million and suspending Samsung BioLogics’ trading, the commission could also recommend that the company be delisted from the Korean stock exchange. Such a delisting would have major impacts on the company; currently, says Korea Times, Samsung Biologics is Korea’s fifth largest firm in terms of market capitalization.
In a letter to shareholders, Samsung BioLogics defended itself, saying, “Samsung BioLogics would like to sincerely apologize to our clients and shareholders for the confusion caused by the recent accounting issue. However, the SFC's announcement today is very unfortunate as it is our firm belief that Samsung BioLogics has not breached any accounting rules at all.”
The company went on to indicate that it sought the advice of multiple accounting firms, all of whom deemed its accounting practices acceptable. Furthermore, the company said that it plans to file a lawsuit to “clearly prove the legality of Samsung BioLogics’ actions.”
News of the scandal and its repercussions come shortly on the heels of reports that Biogen has increased its stake in Samsung Bioepis. Earlier this month, Samsung BioLogics confirmed that it will conclude a transfer of shares to Biogen that has been pending since June of this year. Under the deal, Biogen will receive more than 9 million shares of the joint venture for a payment of approximately $677 million.
