Authorities Find Accounting Violation By Samsung BioLogics, Prosecutors To Probe
South Korean financial authorities conclude Samsung BioLogics violated accounting standards by omitting certain information on its joint venture agreement with Biogen from public disclosures, and have ordered further investigation of a corporate governance decision on the handling in accounts of the JV, Samsung Bioepis. The latest ruling in the prolonged affair could hurt the credibility and business of Samsung BioLogics going forward, although the firm maintains it has done nothing improper.
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Things have turned for the worse for Samsung BioLogics after a second review by financial authorities in South Korea over its accounting related to corporate control over Samsung Bioepis, resulting in fines, a recommendation for dismissal of its CEO, and a suspension in trading in its stock. The company is poised to face tough times ahead, although it reiterates it hasn’t violated any accounting rules and has vowed again to seek legal steps.
While Biogen's exercise of its call option in biosimilar joint venture Samsung Bioepis may help further boost the biosimilar company's global presence and leadership in the sector, the focus in South Korea is more on how the change may affect the outcome of an ongoing accounting inspection at Samsung BioLogics, Samsung Bioepis' biggest shareholder.
Samsung BioLogics shares plunge on suspicions it has violated accounting related to affiliate Samsung Bioepis, but the company says its accounting meets IFRS standards and denies any transgressions. Samsung BioLogics could face a penalty, depending on the outcome of upcoming financial authority meetings and whether Biogen exercises its call option on Samsung Bioepis in the coming months.