Supreme Court finalizes suspension of SFC’s disciplinary actions on Samsung Biologics
Supreme
Court finalizes suspension of SFC’s disciplinary actions on Samsung Biologics
South Korea’s Supreme Court made final
decision to suspend the Securities and Futures Commission(“SFC”)’s primary and
secondary disciplinary actions against Samsung Biologics. The SFC claims that
the company’s failure to write certain terms of the joint venture agreement
with Biogen Therapeutics Inc. into financial statements was an intentional
violation of accounting standards (basis for primary actions), and that the
company’s accounting treatment of Samsung BioEpis as an equity-method
affiliate, instead of a consolidated subsidiary (basis for secondary actions).
The history of each events are chronicled
below.
Primary
disciplinary actions :
- Recommend
the dismissal of the CFO
- Assign
independent auditors for 3 years
- Press
prosecution charges (against the company and the CEO)
(’18.07.12) SFC announced to take primary
disciplinary actions against Samsung Biologics
(’18.10.08) Samsung Biologics filed an
administrative suit against the SFC’s decision.
(’18.12.18) Samsung Biologics requested to
the Seoul Administrative Court for suspension of the decision to 1) dismiss the
CFO, and 2) assign independent auditors for 3 years.
(’19.02.19) The Seoul Administrative Court
accepted the stay of ution by Samsung Biologics until the decision is made
on the administrative litigation.
(’19.02.21) The SFC appealed to the Seoul
High Court on the Seoul Administrative Court’s Feb. 19th ruling.
(’19.05.24) The Seoul High Court ruled
against the SFC's appeal.
(’19.06.10) The SFC made a second appeal to
the Supreme Court on the Seoul High Court’s May 24th ruling.
(’19.10.11) The Supreme Court made a final
decision to rule against the SFC’s appeal.
Secondary
disciplinary actions :
-
Assign independent
auditors for 3 years
-
Recommend the dismissal
of CEO and CFO
-
Revise 2012~2018
financial statements
-
Press prosecution
charges (against the company and CEO)
-
Impose a fine of eight
billion won
(‘18.11.14) SFC
announced to take secondary disciplinary actions against Samsung Biologics
(‘18.11.27) Samsung Biologics filed an
administrative suit against the SFC's decision, and requested for suspension of
the decision to 1) revise the financial statements, 2) assigning independent
auditors for 3 years; and 3) dismiss the CEO and the CFO.
(‘19. 1.22) The Seoul Administrative
Court accepted stay of ution by Samsung Biologics until the decision is
made on the administrative litigation.
(’19. 1.30) The SFC appealed to the Seoul High Court on the Seoul
Administrative Court’s Jan. 22nd ruling.
(‘19. 5.13) The Seoul High Court ruled
against the SFC's appeal made on Jan. 30th.
(’19. 5.23) The SFC made a second appeal
to the Supreme Court on the Seoul High Court’s May 13th ruling.
('19. 9. 6) The Supreme Court supported
the Seoul High Court’s ruling and made a final decision to rule against the
SFC’s appeal.
Supreme Court finalizes suspension of SFC’s disciplinary actions on Samsung Biologics
South Korea’s Supreme Court made final decision to suspend the Securities and Futures Commission(“SFC”)’s primary and secondary disciplinary actions against Samsung Biologics. The SFC claims that the company’s failure to write certain terms of the joint venture agreement with Biogen Therapeutics Inc. into financial statements was an intentional violation of accounting standards (basis for primary actions), and that the company’s accounting treatment of Samsung BioEpis as an equity-method affiliate, instead of a consolidated subsidiary (basis for secondary actions).
The history of each events are chronicled below.
Primary disciplinary actions :
- Recommend the dismissal of the CFO
- Assign independent auditors for 3 years
- Press prosecution charges (against the company and the CEO)
(’18.07.12) SFC announced to take primary disciplinary actions against Samsung Biologics
(’18.10.08) Samsung Biologics filed an administrative suit against the SFC’s decision.
(’18.12.18) Samsung Biologics requested to the Seoul Administrative Court for suspension of the decision to 1) dismiss the CFO, and 2) assign independent auditors for 3 years.
(’19.02.19) The Seoul Administrative Court accepted the stay of ution by Samsung Biologics until the decision is made on the administrative litigation.
(’19.02.21) The SFC appealed to the Seoul High Court on the Seoul Administrative Court’s Feb. 19th ruling.
(’19.05.24) The Seoul High Court ruled against the SFC's appeal.
(’19.06.10) The SFC made a second appeal to the Supreme Court on the Seoul High Court’s May 24th ruling.
(’19.10.11) The Supreme Court made a final decision to rule against the SFC’s appeal.
Secondary disciplinary actions :
- Assign independent auditors for 3 years
- Recommend the dismissal of CEO and CFO
- Revise 2012~2018 financial statements
- Press prosecution charges (against the company and CEO)
- Impose a fine of eight billion won
(‘18.11.14) SFC announced to take secondary disciplinary actions against Samsung Biologics
(‘18.11.27) Samsung Biologics filed an administrative suit against the SFC's decision, and requested for suspension of the decision to 1) revise the financial statements, 2) assigning independent auditors for 3 years; and 3) dismiss the CEO and the CFO.
(‘19. 1.22) The Seoul Administrative Court accepted stay of ution by Samsung Biologics until the decision is made on the administrative litigation.
(’19. 1.30) The SFC appealed to the Seoul High Court on the Seoul Administrative Court’s Jan. 22nd ruling.
(‘19. 5.13) The Seoul High Court ruled against the SFC's appeal made on Jan. 30th.
(’19. 5.23) The SFC made a second appeal to the Supreme Court on the Seoul High Court’s May 13th ruling.
('19. 9. 6) The Supreme Court supported the Seoul High Court’s ruling and made a final decision to rule against the SFC’s appeal.
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