The Seoul High Court ruled in the second instance that the sanctions imposed by financial authorities, including the 'recommendation for the dismissal of executives' related to the allegation that Samsung Biologics engaged in intentional accounting fraud, should be revoked. This conclusion is the same as that of the first instance.
On the 11th, the Administrative Division 6-3 of the Seoul High Court (Director General Judges Baek Seung-yeop, Hwang Ui-dong, and Choi Hang-seok) dismissed the appeal from the Securities and Futures Commission regarding the lawsuit to cancel the recommendation for the dismissal of executives.
The sanctions ordered by the court to be revoked are the first sanctions imposed by the Securities and Futures Commission on Samsung Biologics in July 2018.
At that time, the Securities and Futures Commission judged that Samsung Biologics intentionally failed to disclose whether it held call options for Samsung Bioepis, established in 2011 through a joint venture with Biogen, during the preparation and public announcement of the financial statements from 2012 to 2014. Consequently, it decided on the first sanctions, including the recommendation for the dismissal of the Chief Financial Officer (CFO), designation of an auditor, and criminal prosecution.
The Securities and Futures Commission also determined that Samsung Biologics engaged in accounting fraud amounting to approximately 4.5 trillion won by changing the equity value of investments in Samsung Bioepis for the 2015 fiscal year from the book value (290 billion won) to the market value (4.8 trillion won) without justification. It subsequently imposed second sanctions in November 2023, including the recommendation for the dismissal of the representative director and executives, a penalty surcharge of 8 billion won, and a correction request (revising the financial statements).
The first instance ruled in September 2020 in favor of Samsung Biologics. The court stated, 'The first sanctions are absorbed and changed by the second sanctions; thus, they do not exist independently.'
Additionally, in a separate lawsuit regarding the cancellation of the second sanctions, Samsung Biologics won in the first instance last August. This trial is currently ongoing in the second instance.
Meanwhile, Lee Jae-yong, Chairman of Samsung Electronics, and other Samsung executives were indicted on 19 charges, including the accounting fraud allegations against Samsung Biologics in September 2020, but were acquitted in both the first and second instances and are awaiting a ruling from the Supreme Court.