Samsung BioLogics denied continuous allegations of accounting fraud in a statement issued Friday.
The company is currently under investigation by the Financial Supervisory Service (FSS) for accounting fraud worth 1.9 trillion won ($1.7 billion) in 2015, to boost the company’s value ahead of its initial public offering last year.
Samsung BioLogics released the statement after JoongAng Ilbo, a local news outlet, reported that the FSS recently decided to deal with Samsung Biologics' handling of the value of its equity stake in Samsung BioEpis as a vital issue for proving the allegations of the fraudulent accounting.
Samsung Bioepis is a joint venture between Samsung Biologics' and Biogen, a U.S.-based multinational biotechnology company.
The newspaper claimed that Samsung BioLogics posted a surplus of 1.9 trillion won by converting the value of the company’s stake in Samsung Bioepis for its market value of 4.8 trillion won instead of its acquisition price of 300 billion won in 2015. The daily cited opinions from the top four accounting firms in Korea -- KPMG Samjung, Deloitte Anjin, PwC Samil and EY Hanyoung -- to back up its claims.
“The opinions from top four accounting firms in Korea mentioned in the article do not reflect the official position of the four companies,” Samsung BioLogics said in a statement. “Among the four mentioned, three of them previously presented their official assessment of Samsung BioLogics’ financial records, stating that the company’s accounting books were in order.”
The company stated that KPMG Samjung, the company’s designated accounting firm from 2012 to 2015, Deloitte Anjin, its external auditor selected by the FSS before its 2016 IPO, and PwC Samil, the chosen accounting firm for Samsung C&T, the parent company of Samsung BioLogics, cleared the company’s accounting books.
“Furthermore, the Korean Institute of Certified Public Accountants, which was given an official mandate from the FSS, found no violations of accounting standards,” the company added.
It also refuted the daily’s claims that the accounting fraud sought to influence the merger ratio of Samsung C&T and Cheil Industries by overstating its profit in 2015.
“We have explained several times that the merger of Samsung C&T and Cheil Industries was completed on Sept. 1, 2015,” the company said. “However, the company’s accounting book results were included in the books long after the merger was completed in December 2015.”
The company added that it would continue its cooperation with the FSS regarding the ongoing audit.
The accounting fraud allegation was brought up by the People's Solidarity for Participatory Democracy, a domestic progressive civic group, in February last year. The civic group claimed that the company's surplus of 1.9 trillion won in net profit in 2015 had many problems.
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