Celltrion companies, others, fined a total of 15.4 billion won

Celltrion headquarters in Songdo, Incheon [CELLTRION]

The Financial Services Commission (FSC) imposed a combined fine of 15.4 billion won ($12.5 million) on three listed Celltrion companies, five responsible executives, and their accounting firms that engaged in transfer pricing in violation of accounting rules.

Celltrion, the manufacturer of pharmaceutical products, was fined 6 billion won, while two of its responsible executives 415 million won. Ernst & Young was ordered to pay 4.95 million won for being "negligent" in the audit procedures.

Celltrion Healthcare, the marketing company that handles the overseas distribution of Celltrion products, was hit with a 6.04 billion won penalty, while its three executives were fined 484 million won. Samjong KPMG and Ernst & Young are facing 410 million won and 570 million won in penalties, respectively.

The FSC fined Celltrion Pharm, which handles the domestic sales of the products, 992 million won.

The three companies were under investigation over the past four years for the alleged accounting irregularities. Concerns were centered on whether Celltrion Healthcare and Celltrion Pharm were illegally profiting from transactions with the pharmaceutical manufacturer.

Last week, the FSC finished its investigation and determined that the three companies were grossly negligent for the instances of transfer pricing and violating government accounting guidelines.

The companies could be taxed with up to 20 percent of the profit generated from the wrongful transactions. Celltrion is said to have gained 130 billion won, Celltrion Healthcare 160 billion won and Celltrion Pharm 13 billion won in the scheme in 2016.

The FSC said the acts were found to be "unintentional," which saved the companies from the risk of delisting.

BY SARAH CHEA [chea.sarah@joongang.co.kr]