Court Merges 2 Samsung Bio Penalties by SEC, Cancels Executive Dismissal Order

Incheon Yeonsu-gu Samsung Biologics Photo by Yonhap News

[Asia Economy Reporter Seongpil Cho] Samsung Biologics won a lawsuit filed in response to the first sanction imposed by the Securities and Futures Commission regarding allegations of accounting fraud.

The Seoul Administrative Court, Administrative Division 13 (Chief Judge Nakwon Jang), ruled in favor of Samsung Biologics on the 24th in the cancellation lawsuit filed against the Securities and Futures Commission seeking to revoke the recommendation for dismissal of executives. The court stated, "This case concerns the disposition made on July 25, 2018," and added, "This disposition is of a nature that can be considered absorbed and merged into the second disposition made thereafter, and is judged not to exist independently, thus it is canceled."

The Securities and Futures Commission previously determined in July 2018 that Samsung Biologics violated accounting standards by granting a stock purchase option (call option) of its subsidiary Samsung Bioepis to its joint venture, the U.S. company Biogen, without disclosure. The commission decided on sanctions including recommending the dismissal of CEO Tae-han Kim and other responsible executives, as well as appointing an auditor. In November of the same year, the commission judged that Samsung Biologics had intentionally committed accounting fraud and imposed a fine of 8 billion KRW.

The Securities and Futures Commission's second sanction is currently subject to a separate administrative lawsuit. The case is being heard by the same court’s Administrative Division 3 (Chief Judge Hwanwoo Yoo), which held the first hearing in January this year and has conducted a total of four trials so far.