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Photo = Yonhap news |
[Alpha Biz= Paul Lee] SEOUL, South Korea – June 11, 2025 — A South Korean appellate court has upheld a lower court ruling in favor of Samsung Biologics, dismissing a regulatory order recommending the dismissal of executives over alleged accounting violations.
The Seoul High Court’s Administrative Division 6-3 (Presiding Judges Baek Seung-yeop, Hwang Ui-dong, and Choi Hang-seok) on Tuesday rejected an appeal by the Securities and Futures Commission (SFC), under the Financial Services Commission, affirming the first trial’s decision that the regulator’s dismissal recommendation was unjustified.
The case stems from Samsung Biologics’ 2011 joint venture agreement with U.S.-based Biogen to establish Samsung Bioepis. Samsung initially held an 85% stake, while Biogen held 15%, under terms that included a call option and capital funding guarantees.
The Financial Supervisory Service (FSS) claimed that Samsung Biologics failed to disclose the call option and funding guarantee in its financial statements, and reported this to the SFC. In July 2018, the SFC concluded that the company had intentionally omitted this information and recommended dismissing its financial executive and appointing an external auditor (First Disposition).
In November 2018, following a re-audit, the SFC escalated the issue by concluding that Samsung Biologics had committed accounting fraud by inflating its assets and equity — issuing a Second Disposition that included the dismissal of CEO Kim Tae-han and a recommendation to restate financial statements.
However, the first-instance court ruled that the two dispositions could not be treated independently, stating the first disposition was absorbed into the second, and therefore invalidated the executive dismissal recommendations and associated penalties.
Tuesday’s appellate ruling reaffirmed that stance, dealing another setback to the financial regulator’s efforts to penalize Samsung Biologics over the long-standing accounting dispute.
Separately, Samsung Biologics also won a first-instance ruling in August 2024 in another administrative case contesting KRW 8 billion in fines and additional sanctions based on the same accounting allegations. That case is currently pending appeal.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
