A long-running accountancy probe by South Korea’s financial regulator, the Securities and Futures Commission (SFC), concluded that Samsung BioLogics had not disclosed that Biogen had the option to up its stake in their joint venture, Samsung Bioepis, to 49.9%.
The regulator announced in a statement: “The SFC concluded that Samsung BioLogics had violated accounting standards by intentionally omitting information regarding its joint venture agreement with Biogen in its public disclosure; therefore, the SFC approved measures against Samsung BioLogics − request for dismissal of executives in charge; designation of external auditors for three years; and referral of the case to prosecutors.”
In addition, the company’s auditor, Samjong KPMG, would be restricted from auditing the company for four years, with the Samjong KPMG also referred to prosecutors for violation of auditing standards.
Biogen recently chose to exercise its option to increase its ownership of the biosimilars company, paying $700m (€600m) in the process.
When we approached Biogen to determine whether the SFC’s ruling would impact this decision, a spokesperson refused to be drawn on the issue – referring back to the press release that had been issued at the time of the announcement and directing further enquiries to Samsung BioLogics.
At the time of publishing, Samsung BioLogics has not responded to a request for comment.
Behind these conclusions from the SFC, there is the more serious allegation that Samsung BioLogics had breached accounting rules by the manner in which it changed its valuation of Samsung Bioepis.
The SFC has delayed its decision on this charge until the Financial Supervisory Service had produced a new audit report.