News
Frances Ball 30 Apr 2019 01:31pm

Samsung executives arrested over £3bn fraud

Employees at Samsung’s biopharmaceutical unit have been arrested on suspicion of destroying evidence to cover up an alleged fraud of Won4.5tn (£3bn)

Samsung Bioepis is the biopharmaceutical unit and affiliate of Samsung Biologics. Both are part of South Korea’s biggest conglomerate, Samsung Group.

On Monday, prosecutors in Seoul arrested an executive and an employee on charges of falsifying and destroying evidence – including accounting records and internal documents – and of violating South Korean audit law.

Prosecutors launched a probe into the case last year, but this is the first set of arrests to have been made as part of it.

South Korea’s financial watchdog ruled last year that Samsung Biologics intentionally inflated the value of Samsung Bioepis, which is a joint venture with US drugmaker Biogen. The watchdog argued that the company recognised Bioepis’ market value, rather than book value, and in doing so boosted the value of their own share.

Samsung Biologics filed a lawsuit against the regulator in response, which sought to nullify the disciplinary action – which included recommendations to dismiss both its CEO and CFO.

The two arrested employees have admitted to destroying the evidence ahead of the financial watchdog’s investigation.

Prosecutors now need to determine whether they acted on their own, as they claim, or whether there was an order from superiors to do so

Topics