Rep. Park Yong-jin of the ruling Democratic Party of Korea said on Nov. 7, "It was confirmed that Samsung Biologics (Samsung Bio) committed accounting fraud in the merger process of Samsung C&T and Cheil Industries in 2015. Accordingly, the Financial Supervisory Service (FSS) should launch investigation."
Rep. Park said, "The Samsung Bio accounting fraud scandal should be severely punished as a serious crime that shakes the foundations of the capital market."
In a questioning session of the budget committee, Rep. Park disclosed the internal documents exchanged between Samsung Bio and Samsung`s Future Strategy Office.
He said, "It was revealed that when Samsung C&T merged with Cheil Industries, the company's value was inflated by an accounting firm's assessment of more than 5 trillion won.
Rep. Park claims that Samsung Bio is under suspicion of accounting fraud, and yet another evidence has been found to prove its intent. The documents disclosed by Rep. Park were prepared by the Samsung Bio Finance Team on Aug. 5, 2015.
Rep. Park said, "For the interests of certain large shareholders, it reportedly used false valuation reports to deceive investors and boost nationalism marketing, violating small shareholders' interests."
He added, "There are suspicions that the reason why Samsung Bio inflated the value of Cheil Industries (the parent company) and reflected it in the books is to transfer the managerial right to Samsung Vice Chairman Lee Jae-yong (the largest shareholder of Cheil Industries)."
