The Accounting Oversight Deliberation Committee (AODC), which deliberated on the accounting fraud allegations against Samsung BioLogics, has reportedly ended its deliberation without reaching a conclusion on the issue.
The committee, which is an advisory panel to the Financial Supervisory Commission (FSC), left the task of handing down a verdict on the controversial issue to the Korean Securities and Futures Commission (SFC) under the FSC.
The AODC is to deliver the views of its members expressed through the three meetings in May to the SFC on June 7.
The SFC is expected to convene a couple of times before finalizing the punitive measures against Samsung BioLogics.
"I understand that the AODC members refrained from voting on whether or not Samsung BioLogics committed accounting fraud when they met on May 31 for their third meeting," said an FSC official familiar with the issue on June 4.
Some members insisted on voting, but others suggested that their role be limited to highlighting the key issues so that the SFC could make a verdict easily. Accordingly, individual members merely gave their opinions, stopping short of making judgments.
Some board members opined that Samsung BioLogics committed accounting fraud on purpose, but others offered different opinions.
News reports have it that three of the committee members sided with Samsung BioLogics, while the remaining four were supportive of the Financial Supervisory Service (FSS), which had made a provisional conclusion that Samsung BioLogics committed fraudulent accounting.
Some analysts say that the division among the AODC members suggests the SFC is unlikely to rule that Samsung BioLogics intentionally fabricated its accounting documents.
It is noteworthy that short selling of Samsung BioLogigs shares fell one day before the SFC meeting. Analysts took it as a signal that speculative short selling groups made a bet on Samsung BioLogics being freed from the accounting fraud allegations.
At the Korean Stock Exchange on June 5, Samsung BioLogics closed at 421,000 won, up 0.48% (2,000 won) from the previous trading day.
According to the Korea Exchange, borrowed Samsung BioLogics shares totaled 370,674,114 on June 4, down over 500,000 shares compared to May 14 when the figure stood at 42,119,835 shares following the FSS’ premature disclosure of its a provisional conclusion on on May 1.
The decrease in the number of borrowed shares means that the number of shares borrowed for short selling sank and many investors expect the share price would not to fall further.
Some brokerages have recommend investors to buy the Samsung BioLogics stock. KB Securities presented Samsung BioLogics as a weekly recommended stock, saying that the company is expected to enjoy an upward price trend as concerns about Samsung BioLogics being delisted or suspended from trading have been eliminated."