Samsung BioLogics Co. has filed an administrative lawsuit against the country‘s financial regulator for its recent ruling that the company intentionally committed accounting fraud.
The company said on Nov. 28 that it has filed an administrative lawsuit with the Seoul Administrative Court against the Securities & Futures Commission (SFC) under the Financial Services Commission (FSC).
The company also filed for an injunction to suspend the execution of the SFC’s ruling announced on Nov. 14. The commission told the company to revise its financial statements and designate an auditor, imposed fines on it, and recommended it to dismiss its CEO and other officials involved in accounting fraud.
Samsung BioLogics filed an administrative lawsuit to have these penalties canceled. Its request for an injunction is intended to suspend the execution of these measures pending a final court verdict on the case.
However, the company excluded the SFC’s other measures, including its request for prosecution investigation, Korea Exchange’s delisting review and suspension of Samsung BioLogics stock trading, because they go beyond the scope of an administrative lawsuit.
On Nov. 14, the SFC concluded that the company intentionally committed accounting fraud at the end of 2015 by changing the status of Samsung Bioepis, a company jointly established with U.S.-based bio firm Biogen, from a subsidiary to an affiliate. It estimated the amount of accounting fraud at 4.5 trillion won (US$4.01 billion) and decided to recommend the dismissal of CEO, impose an 8 billion won (US$7.12 million) fine and pursue a prosecution charge.
An official from Samsung BioLogics said, “We are planning to minimize market confusion and prove the legitimacy of our accounting practices by faithfully proceeding with the upcoming administrative litigation. We will also make every effort to live up to the expectations of investors and customers by concentrating on our core business.”
A majority of experts expect that it will take long for the court to come to a conclusion considering the nature of the administrative lawsuit. The court will seek to deliver a well-thought-out ruling as the financial authorities and Samsung BioLogics have different views on the incident.