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Prosecutors raid Samsung BioLogics factory

May 08,2019
Prosecutors raided a factory of Samsung BioLogics, a biopharmaceutical unit of Korea’s top conglomerate Samsung Group, on Tuesday as part of a probe into alleged accounting fraud by the company.

Investigators from the Seoul Central District Prosecutors Office were sent to the factory in Incheon on suspicions that accounting data that could prove the company’s alleged fraud is there.

Prosecutors are investigating allegations that Samsung BioLogics intentionally violated accounting rules to inflate the value of its subsidiary, Samsung Bioepis, ahead of BioLogics’ 2016 initial public offering.

Earlier in the day, the prosecution filed for a warrant to arrest a Samsung BioLogics official in charge of security over alleged destruction of evidence in connection to the allegations of accounting fraud.

The investigators are searching for accounting data and Samsung BioLogics’ server that were known to be concealed in the floor of the factory in an operation driven by the suspect.

The prosecution reportedly secured testimony from company officials that parts of the floor were removed to conceal the evidence.

The raid is expected to speed up the probe into the company’s alleged fraud and the possibility of its relevance to the transition of a managerial power of Samsung Group. Prosecutors raided Samsung BioLogics’ headquarters in December 2018 and the country’s main stock exchange in March.

The financial watchdog earlier judged in its own inquiry that the alleged fraudulent accounting possibly amounts to 4.5 trillion won ($3.9 billion).

The then-loss making Samsung BioLogics reported sudden profits in 2015 after it changed the method used to calculate the value of Samsung Bioepis, a joint venture with U.S.-based Biogen. Civic groups claimed the alleged fraud was aimed at enhancing heir apparent Lee Jae-yong’s control of Samsung Group.

Samsung BioLogics has claimed that the change of accounting methods was in line with international accounting standards.


Yonhap


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