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Samsung BioLogics in tight spot amid probe, shareholders’ lawsuit
  • By Jeong Sae-im
  • Published 2019.05.14 14:10
  • Updated 2019.05.14 14:10
  • comments 0

Prosecutors are speeding up the probe into Samsung BioLogics for alleged accounting fraud after securing evidence for the suspicion.

After the company was found to have tried to destroy internal accounting documents, minority shareholders have also filed a lawsuit against the firm to demand compensations for damages.

Arrests of executives and employees at Samsung BioLogics and its subsidiary Samsung Bioepis started from April 29. They were on charges of deleting or concealing crucial evidence such as the company’s servers.

They reportedly deleted all the files searched by “merge” or “JY” (Lee Jae-yong, vice chairman of Samsung Electronics) from the laptops and mobile phones owned by scores of people. They also allegedly took out the company’s servers and hid them in their homes or under the floor of the company’s factory. In a raid into Samsung BioLogics’ plant, prosecutors found the employees’ laptops and servers.

The probe is expanding onto high ranking officials at Samsung Electronics. On Saturday, the prosecution arrested a Samsung Electronics executive director at business support task force surnamed Baek and another executive director at security advancement task force surnamed Seo.

The prosecution’s investigation into Samsung BioLogics might be broadened into Samsung Group, as the prosecution suspects that the group might have ordered its biopharmaceutical unit to destroy evidence for window dressing.

Besides, accounting firms Samjong KPMG and Deloitte Anjin have reversed their statements on Samsung BioLogics’ auditing, which will negatively affect the biopharmaceutical company.

Accountants at Samjong and Anjin recently said they had known about a call option in advance before the merger of Samsung C&T and Cheil Industries in 2015, as opposed to their initial stance that they did not know.

Samsung BioLogics argues that the accountants were lying.

Shareholders of Samsung BioLogics are beginning to believe that the biopharmaceutical company was involved in accounting fraud.

Legal sources said 355 minority shareholders of Samsung BioLogics filed a suit against the company, Samjong and Anjin, the Financial Supervisory Service, and the government to claim compensations for damages on April 25.

“Samsung BioLogics cooked the book when it was processing its stake in Samsung Bioepis and disclosed the business report and quarterly report falsely,” one of the shareholders said. “As we believed in Samsung BioLogics and made stock transactions, we suffered damages. Therefore, the company is responsible for compensations,” he said.

The shareholders suing Samsung estimated the total damages at 12 billion won ($10.1 million), based on the closing price of 334,500 won per share as of Nov. 14, 2018. Samsung BioLogics has to pay 8.4 billion won among them, they said.

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