Retail investors file damage suit against Samsung BioLogics in accounting scandal

SEOUL, More than 350 individuals who own stocks in Samsung BioLogics have filed a damage suit against the Samsung Group unit over its alleged accounting fraud, judicial officials said Monday.

In the class action suit filed with the Seoul Central District Court late last month, a group of 355 retail stock investors demanded that Samsung BioLogics, its accounting firms Samjeong KPMG and Deloitte Anjin, the watchdog Financial Supervisory Service and the state jointly compensate for their investment losses caused by the Samsung company's alleged accounting irregularities.

"Samsung BioLogics committed accounting fraud by inflating the valuation of its stake in affiliated Samsung Bioepis. The company also drew up and made public false business reports on the basis of the window dressing. We trusted the company's disclosed information and suffered losses in the process of investing in its stocks. Thus the company is liable for compensation," the lawsuit said.

It claimed that without accounting fraud, they would not have bought Samsung BioLogics shares or could have bought them at lower prices.

The plaintiffs demanded a compensation of 8.4 billion won (US$7.1 million), estimating their combined losses at 12 billion won calculated in terms of the company's closing price of 334,500 won as of last Nov. 14.

Court officials said the damage suit will likely be handled after prosecutors wind up their ongoing investigations into the Samsung company's alleged accounting fraud.

Last week, two Samsung Electronics executives were put under arrest on charges of attempting to destroy evidence related to the alleged accounting fraud by Samsung BioLogics.

The executives were accused of instructing tens of Samsung BioLogics and Samsung Bioepis officials to delete all suspicious documents and texts from their mobile phones and notebooks.

One Samsung BioLogics employee and two Samsung Bioepis officials were earlier detained on charges of participating in the alleged groupwide attempt to destroy criminal evidence. Prosecution investigators found a computer server and tens of notebooks concealed under the floor of Samsung BioLogics plant in Incheon, west of Seoul, in a raid early last week after the arrested employee made a confession.

The nation's financial watchdog earlier judged in its own inquiry that the alleged fraudulent accounting by Samsung BioLogics possibly amounts to 4.5 trillion won. Samsung BioLogics has claimed that a change of its accounting methods in 2015 was in line with international accounting standards.

Source: Yonhap news Agency

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