Prosecutors Re-summon Kim Tae-han, Samba CEO... Strengthening Charges of 'Accounting Fraud'

Kim Tae-han, CEO of Samsung Biologics, who is suspected of involvement in accounting fraud amounting to about 4.5 trillion won, is entering the Seoul Central District Court on the 19th to undergo a pre-arrest interrogation (warrant hearing). Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Hyung-min] The prosecution investigating suspicions related to the merger of Cheil Industries and Samsung C&T Corporation and the succession of management rights within the Samsung Group has re-summoned and questioned Kim Tae-han, CEO of Samsung Biologics.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) called Kim again on the 22nd to inquire about the decision-making process surrounding the change in accounting standards for its subsidiary Samsung Bioepis (Samsung Epis).

The prosecution had summoned Kim multiple times between May and July last year for questioning. In May, they requested an arrest warrant against Kim on charges including accounting fraud and embezzlement, but the court dismissed the warrant, judging that there was room for dispute regarding the establishment of major crimes.

This time, as the prosecution prepares to handle the case concerning suspicions around the Samsung merger, it appears they have begun to strengthen charges related to accounting fraud by investigating Kim.

The prosecution is reportedly planning to conclude the investigation and decide on the punishment of key suspects by next month at the latest.

Samsung Biologics is suspected of increasing the company's book value by 4.5 trillion won by changing the accounting treatment standards from a subsidiary (sole control) to an affiliate (joint control), claiming it lost control over its subsidiary Samsung Bioepis at the end of 2015.

The prosecution believes that Samsung Biologics improperly changed the accounting standards out of concern that reflecting the 1.8 trillion won debt from the joint venture Biogen's call option (stock purchase right) in the financial statements would lead to capital erosion.

It is also suspected that this was intended to justify the inflated company value during the merger of the parent companies Cheil Industries and Samsung C&T Corporation, which was finalized in May of the same year.

Before questioning Kim, the prosecution consecutively summoned high-ranking executives such as former Future Strategy Office Strategy Team Leader Kim Jong-joong, former Deputy Director Jang Chung-gi, and former Director Choi Ji-sung to closely examine the decision-making process of the group’s top management during the merger of Samsung C&T Corporation and Cheil Industries.

This content was produced with the assistance of AI translation services.