SEOUL (Reuters) - A South Korean court has suspended the financial regulator’s disciplinary action against Samsung BioLogics Co Ltd (207940.KS) for allegedly breaching accounting rules, an official at the Seoul Administrative Court said on Tuesday.
In November, the Financial Services Commission (FSC) said the biotech arm of Samsung Group intentionally breached accounting rules ahead of its 2016 listing. It called for the firm’s chief executive officer and chief finance officer to be fired, imposed fines, and requested the firm correct its balance sheet.
Samsung BioLogics filed an administrative lawsuit at the Seoul Administrative Court to nullify the watchdog’s findings and sought an injunction to halt any disciplinary action until the court rules on the matter.
“The court concluded that an immediate sanction on the company could lead to irreparable damage when its violation of accounting standards has yet to be proven in court,” the court official said, declining to be identified due to the sensitivity of the matter.
The FSC in a statement said it will review details of the court’s ruling and plan whether to immediately file an appeal.
Samsung BioLogics, which has denied wrongdoing, confirmed the court’s decision to suspend any sanctions.
“The court’s decision is fortunate. We will do our best to prove the legitimacy of the company’s handling of accounting,” a Samsung official said by telephone.
Samsung must now await the outcome of the prosecutors’ investigation, the timing of which is unknown.
Samsung BioLogics’ head office was raided by South Korean prosecutors last month as part of a criminal probe into alleged accounting fraud after the financial regulator filed a complaint.
Shares of Samsung BioLogics were suspended following the regulator’s findings, and resumed trading in December after the bourse decided the company was qualified to remain listed.
The stock was up 0.1 percent on Tuesday, compared with a 0.7 percent decline in the Kospi benchmark share price index .KS11.
Reporting by Heekyong Yang; Additional reporting by Hayoung Choi; Writing by Ju-min Park; Editing by Christopher Cushing