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FSC holds second BioLogics review session

June 21,2018
The Financial Services Commision (FSC) held its second review session on Samsung BioLogics’ suspected accounting fraud on Wednesday.

The meeting, led by members of the securities and futures commission at the FSC, was ongoing as of press time. Both the Financial Supervisory Service (FSS) and the head of Samsung BioLogics made their cases in the meeting, which examined the company’s bookkeeping practices before the alleged fraud took place in 2015.

“The second meeting started at 10 a.m., and both sides were scheduled to present their cases to the securities and futures commission,” said a source at the FSC. The commission, which is presided over by FSC Vice Chairman Kim Yong-beom, will likely come to a final decision in July. The regulator will hold another meeting on July 4.

The focus of the discussion lies with whether Samsung BioLogics deliberately switched the status of Samsung Bioepis from a subsidiary to an affiliate in order to increase BioLogics’ valuation ahead of a planned public listing in 2016.

The Financial Supervisory Service preliminarily ruled that BioLogics violated accounting rules, but BioLogics denied the allegations. It said that the change was a countermeasure against the growing possibility that Biogen, a U.S. biotech company that jointly owned Bioepis, would execute its call option rights to increase its stake.

The FSS and other critics raised doubts over the timing of the change as BioLogics didn’t mention the details of Biogen’s call option rights before 2015 in its audit reports. The meeting’s focus on previous accounting may be linked to the timeframe of BioLogics’ decision.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]