BioLogics and others are sued by shareholders

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BioLogics and others are sued by shareholders

Shareholders of Samsung BioLogics have sued the company and its executives as the accounting scandal grows.

Legal sources said Monday that 355 shareholders filed a civil lawsuit last month seeking 8.4 billion won ($7 million) from Samsung BioLogics, two accounting firms, the Financial Supervisory Service (FSS) and the central government.

According to the complaint, the shareholders suffered 12.1 billion won in damages due to the alleged accounting fraud, arguing they could have bought Samsung Biologics shares at a lower price or not have bought them in the first place.

They claimed that the accounting firms are partially responsible, as they signed off on the books of Samsung BioLogics from 2015 to 2017.

If it turns out in the end that there was no accounting fraud, the shareholders believe the FSS is responsible for driving down the share price of Samsung BioLogics by announcing that fraud had been committed.

The news of lawsuit adds pressure on the Samsung Group and its affiliates, which are already being investigated on the matter.

Since November last year, prosecutors have been looking into whether Samsung BioLogics intentionally violated accounting rules to inflate the value of its Samsung Bioepis subsidiary ahead of a Samsung BioLogics initial public offering in 2016.

Loss-making Samsung BioLogics suddenly reported profits in 2015 after changing the calculation method for determining the value of the subsidiary.

The prosecution has already raided the Samsung BioLogics headquarters and Korea’s main stock exchange, and has arrested some company executives and employees in relation to the case.

Officials believe that the Samsung Group as a whole may have been involved in the accounting scandal.

Two executives from the Samsung Electronics business support task force were arrested last week on the charge of destroying evidence.

The task force, assembled in November 2017, has served as the control center for Samsung Group since the arrest of Samsung Electronics Vice Chairman Lee Jae-yong.

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