Samsung BioLogics In Hot Water, Faces Allegations On IPO Accounting Fraud

Samsung BioLogics reportedly faces allegation because it is facing an issue on accounting fraud. Bow, the Financial Supervisory Services of the FSS confirmed last Thursday that it will investigate into this matter as the said company falsified its accounting books to facilitate its initial public offering or its IPO.

It has been reported that the FSS has made the decision just this week and it is now in the process of conducting internal protocols assessment in order to start the inspection of the company. It also examined the audit reports of Samsung Biologics after it received reports from politicians and civic groups.

This announcement and news of accounting fraud prompted some investors to immediately dump stocks at Samsung BioLogics which said to have closed at 177,000 won on Thursday. But the company claimed that as for this moment of time, it has not yet received any official notification from the FSS for the conduct of the special audit. It also denied all these allegations which are now escalating on the market as per Korea Times.

Meanwhile, Samsung BioLogics explained that their bookkeeping standards are well followed and clear. It also assured that their people reviewed the standards with the help of several accounting firms including five global securities companies. Moreover, they also explained the legality of their standards to the proper authorities and to their investors too.

Further, Samsung BioLogics also assured that if there will be a review and an audit, the company will fully submit to this and will cooperate and will clarify to FSS that their standards are suitable and just appropriate. As reported by Bloomberg, the allegation fraud started when the People's Solidarity for Participatory Democracy claimed that the company's report of 1.9 trillion won in net profit in 2015 was questionable.

It can be recalled that Samsung Biologics had been reporting deficits starting 2011 to 2014 but later in 2015, it turned cost-effective. This had been possible since reports were telling that the company changed its accounting method for its lesser Samsung Bioepis. The company also remained firm that it will not change its valuation method as this could be misleading despite the FSS impending audit.