Goldman Sachs and Credit Suisse raises in Samsung Biologics Co. uplisting investigation in Seoul

 

 

In an effort to gain information regarding a scheme to uplist a Samsung BioLogics Co. subsidiary on the NASDAQ in 2015, prosecutors raided the Seoul offices of Goldman Sachs and Credit Suisse earlier this month. Samsung BioLogics Co. is Korea-based company that specializes in the development and manufacturing of biological products. Samsung Bioepis Co. is a subsidiary of Samsung BioLogics Co., which the company had planned on uplisting to the NASDAQ in 2015. However, Samsung BioLogics Co. is currently being investigated for falsifying the value of its subsidiary prior to its initial public offering in 2016. According to media reports, Goldman Sachs, an American headquartered multinational investment bank, is suspected of being a major part of this uplisting scheme, while Credit Suisse, a Swiss headquartered multinational investment bank, was also an alleged participant. The Financial Services Commission, a Korean financial watchdog agency, conducted its own investigation into the case and found that the falsified accounting amounted to just under $4 billion (US).

Many civic groups in Korea believe that the scheme was an effort to expand Lee Jae-yong’s control over the powerful Samsung giant. Lee Jae-yong currently serves as the vice chairman of Samsung, and as the son of the Chairman of Samsung is likely to inherit his father’s position. Control over Samsung is of high value as it is currently the largest business group in Korea. Lee Jae-yong is also powerful in his own right with an estimated net worth of $7.9 billion (US), making him the third wealthiest person in South Korea.

The uplisting of the Samsung BioLogics Co. subsidiary would effectively improve the value of the business group and extend the power of those involved. Details of this case still remain unsolved, it is likely that the documents recovered by the raid of Goldman Sachs and Credit Suisse will shed more light on the ongoing investigation.