Prosecutors in South Korea have broadened an investigation into alleged fraud at Samsung BioLogics, which the company has disputed. As a part of this investigation, a Samsung executive was arrested overnight on allegations of ordering the destruction of evidence related to suspecting accounting fraud at a Samsung affiliate.
The executive is accused of ordering the destruction and manipulation of accounting data and other internal documents of Samsung BioLogics and Samsung Bioepis in 2018. The development was first reported by South Korea-based news agency Yonhap.
As a part of this investigation, around eight employees of Samsung and its affiliates have now been arrested. This comes at a time when South Korean prosecutors broaden an investigation into whether top executives covered up evidence linked to alleged accounting fraud in 2015 at the company’s biopharmaceutical unit.
Last month, prosecutors raided a Samsung BioLogics factory and recovered a cache of hidden electronic devices. The prosecutors believe that the newly found electronic devices are linked to the case.
As per the regulators, Samsung BioLogics inflated the value of affiliate Samsung Bioepis by $3.9 billion. Critics have said the move artificially increased the value of parent Cheil Industries to enable an $8 billion merger with Samsung C&T, which held a key stake in Samsung Electronics.
At that time, Lee Jae-Yong, heir to the Samsung group, was a large shareholder in Cheil with a 23 percent stake but he did not own C&T shares and his direct stockholding of Samsung Electronics was less than 1 percent.
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Prosecutors said that Ahn and Lee convened the May 5 meeting after the Financial Supervisory Service notified Samsung BioLogics and Samsung Bioepis of their suspected window dressing. They claim that since then, they masterminded the entire process of evidence destruction and manipulation at the two biotech companies.
(Source)
