Regulator: Samsung BioLogics intentionally violated accounting rules in 2015

Samsung BioLogics CEO Kim Tae-han / Yonhap

The financial regulator on Wednesday ruled that Samsung BioLogics Co. intentionally violated accounting rules in 2015, a decision that could lead to the delisting of the biopharmaceutical firm.

Kim Yong-beom, vice chairman of the Financial Services Commission (FSC), said the FSC referred the case to prosecutors. Shortly after the decision, the Korea Exchange halted after-hours trading of Samsung BioLogics.

The regulatory probe by the Securities and Futures Commission centers on questions about Samsung BioLogics' sudden profits in 2015 after years of losses. Samsung BioLogics reported a net profit of 1.9 trillion won ($1.68 billion) that year after changing the method used to calculate the value of its affiliate, Samsung Bioepis Co., which is a joint venture with the U.S.-based Biogen Inc.

Critics have argued that Samsung BioLogics might have inflated the profit ahead of its listing in 2016.

The FSC also decided to impose a fine of 8 billion won against Samsung BioLogics and recommended the firm dismiss its chief executive due to responsibility for the accounting breach.

Samsung BioLogics' auditing firm Samjong KPMG will be also barred from conducting an audit into Samsung BioLogics over the next five years, the FSC said.

The FSC ordered Samjong KPMG to pay a fine of 170 million won.

The Korea Exchange has 15 days to review a possible delisting of Samsung BioLogics. (Yonhap)