South Korea’s financial watchdog is close to wrapping up its reexamination into the allegation of accounting irregularities of Samsung BioLogics with the same conclusion of identifying intentionality behind the wrongdoing as in the first round.

The Securities and Futures Commission (SFC), the auditing and decision-assisting arm of the country’s top financial authority Financial Services Commission (FSC) in July withheld judgment on fraudulent accounting practice as claimed by the Financial Supervisory Service (FSS) and ordered the agency to take a second look.

The FSS reportedly has not changed its initial position and is expected to recommend referring the case to prosecutors for further investigation and slap heavy penalties of sacking the CEO and fining up to 6 billion won ($5.32 million). The punishment could be eased in the final review by the SFC.

Shares of Samsung BioLogics fell 3.74 percent to close Wednesday at 450,000 won.

According to financial authorities on Tuesday, the FSS maintains that the Incheon-based contract drug maker had clearly breached accounting standards in 2015 to inflate the value of Samsung Bioepis, a joint venture it set up with U.S. biotech Biogen, ahead of going public. The FSS found faults with the company’s accounting practice from 2012.

The FSS is expected to issue a preliminary notice to Samsung BioLogics and its auditors of measures it can take concerning the suspected accounting rule breach this month. The disciplinary action will then be discussed by the SFC and finalized by the FSC likely in December.

Samsung BioLogics has been defending itself to clear the accounting fraud allegations. The company vowed to take legal actions against the government offices, but it reportedly has handed in self-remedial proposals, suggesting it has opted for an out-of-court settlement.

By Jin Young-tae and Minu Kim

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