News that Samsung Biologics (KRX:207940) is facing a probe by South Korean regulators over its valuation ahead of an initial public offering last year sent its share price down this week in Seoul.
South Korea’s Financial Supervisory Service is running a special audit of the drugs contract manufacturer, prompted by a Korean Institute of Certified Public Accountants review that found “unclear parts” in audits run before the IPO.
“We have found some discrepancies in Samsung BioLogics’ audit reports after reviewing them in accordance with the opinion of civil groups and political parties,” an FSS official said, according to the Korea Herald.
Samsung Biologics, after posting net losses for year, swung to black ink in 2015 after a revaluation of its stake in Samsung Bioepsis. The company said its bookkeeping would pass any scrutiny and denied the allegations, saying its Bioepsis stake was reported as a 1-time event in its net profit after Bioepis’ status changed according to International Financial Reporting Standards.
Samsung Biologics reported net profits of $1.70 billion (₩1.9 trillion) in 2015, after putting up losses for the prior 4 years, the newspaper reported. The IPO last year raised $2.10 billion (₩2.25 trillion).
“If an additional audit is carried out, we will work diligently in accordance with established laws and procedures. We expect that the appropriateness of the accounting practice will be clarified during the investigation,” Samsung Biologics said in a statement.
The company’s stock closed down -3.5% at ₩177,000 (about $158.37) apiece today in Seoul.
($1 = ₩1,117.64)
Material from Reuters was used in this report.
