Biologics’ IPO is facing scrutiny
The Financial Services Commission, the country’s top financial regulator, announced the loosening of listing requirements in 2015, a year before the bio unit’s IPO so that unprofitable companies like Samsung Biologics could be listed on Kospi.
The Incheon-based company that suffered deficits for five consecutive years would not have qualified under the previous regulations, which require an operating profit of at least 3 billion won ($2.6 million) for listing on the main bourse Kospi.
The revised rule without the criteria went into effect on Nov. 5, 2015, and Samsung Biologics debuted on Nov. 10, 2016 to become the first company to benefit from the regulatory change.
Lee Jae-yong, vice chairman of Samsung Electronics, admitted that Samsung Group gave a daughter of the president’s confidante a horse, but declined to respond to speculation that the company offered her around 3.5 billion won.
Some believe that the government and regulators devised preferential laws and regulation for the Samsung affiliates in return for pay.
Both the government and Samsung Biologics denied the allegation.
“The Financial Services Commission has noting to do with the scandal,” said a spokesperson at the FSC. “We amended the rules to bring in companies with great potential for public trading,” the spokesperson said.
The regulatory agency hailed the revision as a “Tesla Requirement,” noting that the U.S. automaker was also in the red.
“To grow new growth engines, the listing should be allowed if a company has growth potential and some grounds for business,” Yim Jong-yong, chairman of the FSC, said in September.
Korea Exchange, operator of the country’s trading boards, echoed the stance.
Despite the explanation, the independent counsel that investigates the presidential scandal raided the offices of the FSC last week. It seized capital market and financial policy bureaus, the two central departments in charge of overseeing listing regulations and other financial policies.
Another question is whether the regulator used its power to influence the merger between Samsung C&T and Cheil Industries.
Jeong Eun-bo, vice chairman of the FSC, and Jeong Chan-woo, CEO of Korea Exchange and FSC’s former vice chairman were summoned for questioning this week.
The ongoing investigation has revealed a potential tie between the presidential scandal and the IPO of Samsung Biologics.
The Hankook Ilbo reported on Friday that the independent council found “Samsung Biologics” written in one of the notes by former senior secretary Ahn Jong-beom, who was indicted for his role in the scandal. Samsung Biologics denied the report.
“It is a groundless claim that Samsung Biologics received any unfair support from the Financial Services Commission,” the company said in a statement.
BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
with the Korea JoongAng Daily
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